Let's compare two different types of loans:  mortgages and/or credit cards.  Interest rates on mortgages are currently in the 4-10% range where as interest rates on credit cards are in the 8-30% range with the average somewhere around 15%.  Why is this so? 

When you borrow money for a mortgage, you use your home as collateral.  If you fail to repay your mortgage debt, the bank can (and will) recoup their money by repossing their property.  This is called foreclosure. Contrast that scenario with a credit card.  If you buy a nice Armani sweater with your credit card and you fail to pay back the debt, the card company can't repossess your sweater. It would be way to costly to do so.

As a result, the interest rate ends up being higher on credit cards as opposed to mortgages.  Card companies charge higher interest rates to compensate for card holders who don't pay their debt. Thus the whole group sufferrs.

In today's day and age, debt is almost inevitable.  From cars to college loans, and from credit cards to mortgages, most people need to borrow money in some way, shape, or form.  Mortgages offer the cheapest solution (dollar for dollar) when you must go in debt.  So your mortgage debt is the cheapest way to leverage your debt to create real long term wealth.

For more info, check out my blog at www.mortgage-wealth.com.