> after 30y you end up with a house that worth $1M
In his video, Sal Khan did an apples-to-apples comparison: He compared the net out-of-pocket costs of (i) an interest-only mortgage in which you build no equity, and (ii) renting, where you likewise get no equity.
If you also want to build equity in your house, in addition to merely paying the interest, then that's an additional out-of-pocket cost (which unlike the interest payment is not tax deductible).
That's not to say his numbers are realistic approximations. But his basic approach to comparison seems sound.
It doesn't make sense to ignore the fact that you ending with owning the house. Maybe the numbers still works but if he ignores that fact his entire presentation is useless.
At the end of the 30 years, the buyer in the video would not own the house. He would still owe $1M in order to own the house (if the market is good, the house could very well be worth more than $1M, but that is besides the point).
The amount that he was paying monthly goes towards paying off interest on the loan, property taxes, etc. only.
In his video, Sal Khan did an apples-to-apples comparison: He compared the net out-of-pocket costs of (i) an interest-only mortgage in which you build no equity, and (ii) renting, where you likewise get no equity.
If you also want to build equity in your house, in addition to merely paying the interest, then that's an additional out-of-pocket cost (which unlike the interest payment is not tax deductible).
That's not to say his numbers are realistic approximations. But his basic approach to comparison seems sound.