[xavils]

Thanks for the concern. The logic behind the scenes goes like this:

- You pay 20K for a house.

- You owe 80K + 80K * 2.5% * 40 years. That's your total debt.

- If you want to cancel the mortgage, you must pay 80K, and your net worth will go up because you do not have the 40 year mortgage anymore (even if you just paid 80K).

- If you buy and sell one year after, the same happens with mortgage towards your net worth. In terms of savings, during 1 year you will get approx 600 * 12 rent, -350 * 12 mortgage. That's 3K more. Then your remaining savings will go up 1% (as savings account return) which is around 200. Last, Since it's a boom in the economic cycle, while your debt will have diminished, the value of your house will have increased. So basically you sell the house for more, owe less and that is the result.

This situation is what makes the world go crazy over real estate, become overbought and then, BOOM. Economic crisis.