Yes, of course interest payments on a home add to the total cost of purchase. However I liken interest payments to rent payments and refer to this as my Accomodation Cost. The big difference between interest and rent, is that interest payments go down and disappear over time, rent will be increasing forever.
The principal payments however are your investment, your asset. Which will grow over time.
How do you see ZIRP & QE effecting hard assets? With bonds and deposits offering near zero returns where are investors going to look to?
