I'm not sure if I'd call it irrelevant. People have to do fast home sales for many reasons, and it can come up as a necessity at any time. Life can be a twisty road that we can't foresee. I suppose I can't disagree that hoping for the best makes it irrelevant.
Your second statement I wanted to agree with but you never really win with any mortgage (other than getting a home, which is important).
You'll pay for any house at any rate 2-3+ times over if you just pay the minimum payments. When you go to sell it at the end, your home will not have doubled in value or more. Not for anyone born after 1980 at least.
The only way to win financially is to pay off the house, or beat out usury by producing reliable market gains or other income to outpace it. Easier said than done, I would just pay off a home as fast as possible.
> You'll pay for any house at any rate 2-3+ times over if you just pay the minimum payments.
Maybe that's the problem - making only the minimum payments?
The people making only the minimum payment due would probably have screwed themselves in other ways, financially, even if interest remained the same.
I bought my house in Dec-2016[0]. My outstanding principle owed to the bank right now is just a hair over 17% of what the original principle was when I was granted the loan.
Whenever my circumstances improved (wage increases due to moving jobs, cash bonuses in employment, etc), the extra money each month always went into my mortgage, despite complaints from my wife that we could do with a nice holiday in some other part of the world (or that she could do with a new car[1]).
That's basically 6 years. Now perhaps there are people who did not have their income improved over 6 years, but I don't think that the majority of borrowers experienced no income improvement[2].
The real problem is that borrowers have been making the minimum monthly payments, and spending the increased income elsewhere (new iShinies, new cars, new furniture, expensive holidays ... whatever).
People underestimate just how much inroads they could make into their principle if they didn't have high monthly car payments, or "need" a 24-month cell plan that basically sells them the phone at twice the price because "Look, I get all these minutes and data for free each month".
[0] I'm not in the US, although in the country I am in, I'm in a fairly middle-class and desirable area
[1] As someone who can rebuild just about anything in an ICE car, I keep her car running just fine, even though it's a 2011 hatchback.
[2] I admit, I experienced drastic income improvement (roughly 40% increase) when I switched from being an embedded developer to a backend developer. Completing an MSc didn't hurt either.
Maybe not at 7%. Maybe not at 3,5% either. But at 1-2% fixed for 10-20 years and you don't have to refinance, you win. So your statement is a bit broad.
I think it's a good exercise to compute the total interest over the time of the credit and relate that to the cost of renting.
