The word mortgage is made up of two latin words – Mort – which means death and gage which means pledge – a mortgage is a death pledge. Yikes.
So get this – here’s a quote from a study about the JAK Bank in Sweden which does not charge compound interest and yes, still makes money. Believe it. And start asking why we aren’t asking more about the perils of compound interest on our economic and social well being.
Compound interest rates have a huge impact on our lives, socially, economically,and environmentally.Yet this issue is seldom discussed let alone analyzed.The sheer mathematical facts reveal what the compounding of interest over short intervals does to governments,small businesses,and households for the benefit ofglobal banks.In ordinary circumstances,a debt at 3% compound interest will double in 24 years;at 6% will double in 12 years;and at 12% will double in 6 years.Thus with a variable rate interest on a 25-year mortgage, homeowners frequently pay three to four times the sum they borrowed in the first place.Ifpayments are missed,penalty charges, default fees, and interest charged on interest can escalate costs higher still.
The Latin origin ofthe word“mortgage”–“grip of death”– spells out the dangers that the debt treadmill involves.The more people owe creditors,the more they have to work to pay it off. Forty years ago,mortgages were mainly paid by one wage-earner.Now it takes two earners to keep pace with thetreadmill.
I don’t know, I think I’m ready to move to Sweden or advocate for a bank or credit union that will also liberate me, my neighbours, my friends, my family and my community by moving to fee based and interest free lending. You with me?
Need more? Read on here.