I Hate Debt, but There Are 3 Reasons I Don't Mind Having a Mortgage

A mortgage isn't like other kinds of loans for three big reasons.

I really do not like being in debt.

I refuse to use credit cards unless I can pay them off in full at the end of the month. And I haven't taken out a car loan in almost 20 years, instead preferring to drive my car into the ground before paying cash for a new one.

Despite my aversion to borrowing, however, I have a rather large mortgage loan. And I don't mind that I owe money on my home. Here are three big reasons why that's the case.

1. Homeownership helps build wealth

Most of the time when you borrow money, you end up using it for services or for assets that aren't going to hold their value.

If you take out a vacation loan, for example, you'll enjoy your trip but have nothing to show for it besides the fond memories. And even if you take out a car loan, you're borrowing to buy something that's going to be worth much less money than you paid for it by the time you're done using it.

A home loan is different. When you borrow to buy a house, you'll eventually own that home free and clear and can continue living there without a house payment. That makes it a very valuable asset. You also have the opportunity to sell it in the future if you want to, and hopefully you'll walk away with more than you paid for it.

Because of that, a home loan helps you improve your net worth and build your wealth over time. It's worth borrowing to end up better off in the end.

2. My mortgage interest rate is very low

Many types of debt have high interest rates. In fact, most kinds of loans and credit cards can have rates upwards of 10%. The higher the interest rate, the more expensive your purchase becomes and the more money you're putting into the pockets of your creditors instead of keeping for yourself.

Mortgage rates, on the other hand, tend to be very low -- especially in recent months. Since the rate on my loan is under 3.00%, interest costs are barely above the inflation rate. And the interest rate is well below the potential return I could earn by investing my money in the stock market -- even in very safe investments.

Because I'm hardly paying any interest, I'm better off borrowing for my home rather than paying cash for it since there's little reason to tie up so much money when I could invest it elsewhere and earn a better return on investment (ROI).

3. The interest on my mortgage is tax deductible

The interest I'm actually paying on my mortgage turns out to be even cheaper than that 3.00% rate would suggest.

That's because I itemize on my taxes, which means that the interest is tax deductible. Since I can claim the interest I'm paying and reduce my taxable income, the government subsidizes part of the cost of homeownership. The ability to take advantage of that tax break makes my mortgage cost even less.

Since my loan costs me so little and is helping me take full ownership of an asset that will ultimately leave me with a higher net worth, it should be easy to see why I don't mind having a mortgage loan.