To further understand how banks win, the interest is front loaded. Proponents of home ownership always point to low interest rate for 30 year mortgage. However,

To further understand how banks win, the interest is front loaded. Proponents of home ownership always point to low interest rate for 30 year mortgage. However, with front loaded interest, the majority of payment goes towards interest payment and not building equity in the first 7 - 10 years. For a $400,000 mortgage at 6.4%, after 7 years, you'd have paid over $210,000. However, the equity built is only $38,942. The other $171,226 went entirely to the bank. The average homeowner stays in their home for only 7 to 10 years before selling or refinancing. Which means very little equity building, mostly interest payments.