There’s a lot to disagree with in this piece, but I’ll concentrate on just one piece.
You say “…you are paying a company a large amount of your net worth for what in return? You are paying the mortgage institution for the hope that you could own the house in 20 to 40 years! We forget that you don’t own anything, absolutely nothing and you will continue to own nothing until you pay off the debt 20–40 years later. Absolute insanity!”
Let’s parse this out piece by piece. First, payments are not a part of your net worth. Your net worth is defined as the difference between what you own and what you owe. Your mortgage payments are split into two parts, payment of interest on your mortgage loan balance and reduction of your loan principal. The latter part is just a transfer of a small portion of your net worth from cash in your checking account to a larger equity in your home, which has a zero impact on your net worth. The interest portion does reduce your net worth slightly, but as you’ll see below, it could actually increase your real net worth. Plus, the alternative isn’t having no cost, but rather having to pay rent, which can and frequently does increase over the years, while your the interest portion of your mortgage payments decreases over time (even before accounting for inflation).
Second, you are not paying the lender for the hope of anything. You are paying for their assistance in getting you a place to live right now that you could not afford without that help. It’s up to you to not choose to buy a place that really is beyond what you should buy. If you stray too far from that, the lender will decline to lend you the money.
Third, it’s nonsense to say that you don’t own anything until the mortgage is paid off. What you seem to not be grasping is that you own your home even if you financed it with a mortgage. The home does serve as collateral to guarantee you continue repaying the loan, but you still do own it. For example, if you choose to sell the home, the lender cannot prevent you from doing this, and after you pay them back what you owe them (the payoff amount), anything left over is yours. True, for the first few years of a 30-year mortgage (the most prevalent type), that will be just a little more than what you paid as down-payment on the house. However, after more than 20 years, it will be substantial.
Next, as I demonstrate in this piece, even if your home’s value merely keeps up with inflation, your real cost of a mortgage is minimal and could even turn to be negative (i.e., you’d make money from borrowing that mortgage). The short version is that between inflation eating away at the value of your debt (and the burden of each monthly payment), the low rates on most mortgages these days, and the tax deduction of mortgage interest (for loan balances up to $750k), your true cost of the mortgage is minimal at worst.
Finally, if your home appreciates on average 1% faster than inflation, and if inflation runs the same 3.5%/year average as it has over the past century or so, your home’s price will be about 3.75x higher at the end of the 30 years you’d be paying your mortgage. That means that a home you bought for $100,000 will be worth about $375,000. If your home’s value increased by an average of 6.5%/year, it would be worth about $660,000. Clearly, your assumed 100% increase in value is a significant underestimate (as pointed out by many other commenters here).
