Is the 30-Year Mortgage Worth It? (The Answer May Surprise You)
In the era of bitcoin, everyone wants to be a disruptor — an iconoclast that tears down the old and ushers in the new. That’s how people become billionaires — right?
In that kind of entrepreneurial environment, the 30-year mortgage seems like a dinosaur. “Thirty-year fixed rate?! That’s what my grandfather told me to get! And he still refuses to get into an Uber.”
Well, sometimes you need to listen to your grandfather. Maybe this will blow your mind, but it shouldn’t. The 30-year fixed-rate mortgage is the best deal in the financial world. If you want to turn a good credit score into generational wealth, it’s your best friend.
Why? For three reasons …
1. The Interest is Absurdly Low
Interest is the cost we pay for credit. If you have ever gone mortgage-shopping, you’re probably used to seeing interest rates in the 4-4.5% range. On a good day, you might see rates below 4%.
Compare that to as much 10-20% for personal loans, 5-14%+ for student loans, up to 13% for small business loans from a bank, up to 60% for invoice loans, and as much as 200% for merchant cash advances, according to Value Penguin. And don’t even get us started on credit cards, where interest rates of 20% or higher are the norm.
Yes, we’re in a low-interest-rate environment, and that may come to an end one day … but even if mortgage rates go up, other loan rates will too. The 30-year fixed-rate mortgage will still be among the best deals in town.
2. Your Payment is Locked for a Ridiculous Period
In addition to this low interest rate, the 30-year fixed-rate mortgage locks this rate in for a ridiculously long period of time.
How many businesses get to lock in their cost of credit for 30 years and never have it change? With the 30-year mortgage, your debt service repayment never changes, making it easy to budget compared to other forms of business credit.
Almost no business can take advantage of 30-year fixed-rate financing … but the owner of the lowliest rental house can.
3. It Provides Insane Leverage
Return-on-investment allows businesses to grow … but leveraged ROI makes them grow quickly.
In this article, we demonstrate how adding a simple mortgage to a simple rental house increases the ROI from 6.5% to 17.5%, rocketing past the S&P 500 in terms of annualized return. And that’s before you take into account the many tax advantages of real estate ownership.
Other assets and businesses can be leveraged, but not with the ease that anyone with credit and income can achieve by walking into their local credit union.
The 30-year fixed-rate mortgage is the secret weapon behind the millions of Americans who have become millionaires simply by owning rental property. With terms this good, it’s actually fairly easy to do.
Martel Turnkey makes it even easier by providing you with the properties themselves —rehabbed, rented, and ready to go. We can even provide you with detailed profit-and-loss statements so you know exactly how big a mortgage you should get to avoid going into the red.
Want to put this Holy Grail of a business credit solution into practice, fast? Contact Martel Turnkey today!