Mortgage Awareness

Sunday 2012-04-01

This weekend I tinkered around with Apple Keynote. I thought I’d make something useful. In this video I’m trying to show you how much money the bank makes on your mortgage. Banks like you to pay a low monthly fee on your mortgage because it keeps the loan higher for a longer period of time. This way the bank can cash in on the interest rate, and then cash in again at the end of the mortgage contract, when you are still hopelessly in debt.

“Financial advisors” working for the bank will throw sand in your eyes, saying that keeping your debt high gives you all kinds of tax breaks. But in the end, it’s them who get better of that construction, not you. Don’t fall into this trap. Understand your mortgage contract, learn how the model works, and check your model against the bank’s model (without that financial advisor or the lady at the helpdesk talking to you). You have more room than you think. Use it.