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Comment by simplotek | Hacker News Reader

> (...) slightly more than half of those homeowners haven't paid off their mortgage.

A mortgage is far cheaper than rent. Even though that hypothetical cohort still has debts to pay, their cost of living is far more affordable than renting an equivalent place on the same spot.

Also, due to the ongoing rural-urban migration and gentrification, a house bought a couple of decades ago in the outskirts tends to be far more central and with far more benefits than those in the market right now with an equivalent cost.

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> A mortgage is far cheaper than rent.

I don't know the general stats of this at all. But of the people I personally know, their mortgage payments tend to be on par with what renting a comparable house would cost.

The financial advantage to buying vs renting isn't a smaller monthly bill, it's that you're building equity if you're buying.

In the us, you're also writing off the portion of your mortgage payment that is composed of Interest on your taxes. This effectively amounts to a 20 to 40% reduction in the interest portion of the payment - which, particularly in the first few years of a mortgage lifespan constitutes a large fraction of it.

In a few more years after that, inflation will have started to tilt the advantage substantially in favor of the mortgage over renting, as the latter can freely recalibrate to the market while the former is locked in at the time of signing.

The only downsides for mortgage versus rent are ongoing property taxes and upkeep, which are highly variable from one case to the next, but nowhere approach the cost of paying an equivalent amount of rent. And of course you have to discount equity as well.

In what I’ve read on threads on this very site, a large percentage of US taxpayers don’t do mortgage interest deduction anymore since 2017. I know I sure don’t.

Yeah, if you’re married you’re very likely just a standard deduction taker now. It’s not even close.

That hasn't been true (at least in states with income tax) since 2017 since there is now a cap of $10k on the SALT deduction.

https://www.forbes.com/advisor/taxes/salt-tax-deduction/

Mortgages are inflation proof. The value of my house went up in nominal dollars but the value of the mortgage and its interest rate are locked.

The value can go down and then the value of your mortgage rate is still locked. It works in your favor until it doesn’t.

A fresh mortgage initiated today might be similar to current rents.

I think what the OP meant is a mortgage that was initiated 15 to 20 years ago is far cheaper than rent today which is true.

>> A mortgage is far cheaper than rent.

of comparable size/desirability. The thing with a mortgage is, you're likely 'stuck' with the property you have, and so you may be stuck paying more money than you really need to pay. Likely if instead you just were renting, you could rent something far smaller with smaller payments, and be ahead.

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