I gave numbers for average investments yield 2013. To prove the hypothesis against mortgages, we need solid numbers over a period of time, 10-20 years for the four types of investments.

Now that we are all on the same point on that the mortgage rates are un-acceptably too high, what would be the remedy? Only about 30,000 households are on that bus, meaning million others are out there in the rain. What if a group of investors set up aside some funds and led to the other millions at "acceptable" rates and tap on the economies of scale?

Not necessarily true.

If you have a mortgage at reducing balance and you pay lumpsums in the formative years then this reduces the interest you pay.

Maich has som valid points but there are also assumptions that he is making which are puzzzling!!

1. Why are u assuming that if a guy takes a mortgage for 20 years he will stick to the time plan and actually pay the loan over the 20 years. What if he clears his loan within 5 years. have u calculated the total costs(Mortgage is on a reducing balance and not fixed rate).


I will give you a personal experience not a friend of a friend.

Took a mortgage for a 3bdroom apartment worth 3.2M in 2008. Interest rate of 12% reducing balance. Repayment PM was 36K. With side hustles i used to make a payment of 60K per month and when i got some windfall somewhere i would use it to offset the loan. By march 2010 i had already finished the loan despite interest rate having being adjusted to 16%. In total i had paid 4.8M inclusive interest . I was staying in the house during that duration. 2012 January i sold the house for 6.2M cash. Put a deposit for a stand alone house on MSA road valued at 10.2M. Took a sacco loan and paid of the balance and am currently almost through with paying off the sacco loan.
As we speak the current valuation for the stand alone house am staying in is 15M. And my plan is to sell it off or mortgage it off(use it as collateral) and get another property elsewhere say Kiambu road, Limuru area etc... Mpaka ile siku nitajikuta Karen on a 2 acre plot with a nice house and enough shamba to feed myself.

Like maich said it depends on what you goals are and what ur targets are.
By me being taking the mortgage at that time and accelerating payments i ended up with some profits which enabled me to get a better house without struggling so much.

The biggest issue with mortgages is that most people want to buy their dream homes with the 1st mortgage thus go for exorbitantly priced houses..(making them not able to accelerate payments)

My 2 cents

@Chemos, thanks and that is exactly what i meant in my post #17 though i didnot explain it very well. Started in Koma, then Buru, then Southlands, then Jambo on my way to Karen. Tutakutana huko!.

Start with what you can swallow in titbits and pieces and as you grow, increase both the pieces and the rate of swallowing! Works wonders.

We also need to recognise that real estate also appreciate over time, roughly after 3 years.

Brilliant plans by @Chemos, @Angelica _ann & a4architect.com...we are on the same school of thoughts..currently in my own house mortgage-free but still hope to get to a Karen equivalent estate one day without taking a mortgage