The purchase price of a home is deceptive. When factoring in the total interest paid over a 30-year mortgage, the actual cost can be nearly double the initial price. For a $500,000 home, an additional $400,000 could be spent on interest alone, dramatically altering the long-term financial reality of ownership.

Common wisdom to rapidly pay off a mortgage is suboptimal. Due to compounding, investing extra cash—even if the return rate merely matches your mortgage interest—will generate significantly more wealth over time. One investment compounds up while the other debt amortizes down, creating a large wealth gap.

A proposed 50-year mortgage, intended to improve housing affordability, is a flawed solution. The extended term means borrowers build equity at a negligible rate, making the financial outcome similar to renting and failing to deliver the key wealth-building benefit of homeownership. It's a demand-side fix for a supply-side problem.

The traditional 30-year mortgage for a primary residence is a suboptimal wealth-building tool. A more effective strategy involves securing long-term, non-callable debt to purchase productive, cash-flow generating assets, rather than tying up capital in a personal home.

The trope that renting is 'throwing away money' is flawed. Rent is a payment for valuable, non-financial assets like location flexibility, freedom from ownership costs (taxes, repairs), and the option to invest capital elsewhere—potentially in higher-return, more diversified assets like the stock market.

The current housing market shows an unprecedented 40% cost advantage for renting over owning a home. This massive gap presents a significant headwind for new multi-family construction, as developers would need 25-30% rent growth for projects to be financially viable, an unlikely scenario in a soft market.

Schools teach us to earn a salary, not own equity. The home you live in is for making memories, not money, and is an inefficient way to build wealth. True financial independence comes from owning equity in assets that generate income and appreciate in value, a concept rarely taught.

For those who can afford a down payment but not the monthly mortgage, Emma Hernan suggests a "buy and rent" strategy. Purchase the property, place a tenant in it to cover the mortgage payments, and build equity. You can then move in years later when your financial situation improves.

In the initial years of a mortgage, the vast majority of payments go toward interest, not the principal loan balance. For a $500,000 home, you might pay over $133,000 in interest after five years but only reduce your principal by $26,000, making short-term ownership and flipping unprofitable.