this post was submitted on 20 Aug 2023
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A mortgage where, for instance, 90% of each payment goes to repaying the capital of the mortgage, and 10% to the interest. There's no way it's fair that you should need to pay 2x the value of your house over 25 years.
But why would anyone lend you money for free? What's in it for them?
That's not free. That's just a less predatory rate of return.
I would further suggest that there is a hard cap on the interest which can be charged on any borrowing.
But if I'm a lender and I have spare money to invest I can always just put it into the stock market where I'm on average getting a 7% yearly return. It only makes sense to lend that money to an individual if I'm getting a better rate. Otherwise I'm just losing money.
Then someone else will take that lender's place. Mortgage lending will, at whatever percentage, produce a stable rate of return. If anything, preventing exorbitant interest rates mitigates much of the risk involved in lending.
Why would anyone do that when they get better return for their money elsewhere? You're basically expecting people to do charity or simply just be incompetent and make bad financial decisions thus effectively making you the scammer.
Hardly. The market still exists, and lenders can still make a profit, just maybe not as much. It's not rocket science.
That's merely a desire for a more "fair" system or frankly just something that benefits you rather than someone else. The discussion here is about scams and my argument is that mortage is not one.
You asked for an alternative and I gave you one. You just aren't happy at the idea that massive lenders can afford to make less.
And of course I'm motivated that it benefits me, and millions of ordinary people, what sort of psychopath wouldn't be?
Mortgages are not a scam, I'll give you that. But I'm pretty sure that anyone with a functional moral compass would recognise that usury is immoral.
I asked for an alternative way to finance a house. You either save up yourself or you borrow from someone who has the assets. I don't see a third option.
Yeah ofcourse it would be nice if my mortage didn't have interest or had really low one like it did up untill about a year ago. I'm not against that if my bank decides to offer me such option but that's just fantasy and in no way relevant to the discussion. Ofcourse it would be beneficial to the vast majority of people if the wealthiest ones would settle for less. That's unfortunelately just not the case.
I totally agree with you. What I want is pie in the sky. Without regulation, nothing will change.