Until recently debt was considered something shameful and to be avoided at all costs. Given the growing levels of consumer debt the return of such an attitude would be a welcome thing. With one exception – mortgage debt.

Without mortgages few of us would ever be able to own the roof above our ahead. But beyond that obvious truth mortgage debt, being secured on a tangible asset, is usually much cheaper than other forms of personal debt such as loans, overdrafts and of course the dreaded credit card.

But the most powerful, and often overlooked, advantage of mortgages is the gearing effect that magnifies the benefits of rising real estate prices. Suppose you buy a house for $100,000, and in a year its price rises to $110,000. A 10% gain in a year isn’t at all bad, and quite realistic with real estate. But suppose you only put $10,000 down and borrowedÂ $90,000 from the bank. However much your asset increases you only pay back the original debt (plus interest). So in this case your original $10,000 would have DOUBLED to $20,000 after re-paying the initial loan.

We often scrimp and scrape to pay off our mortgage as soon as possible, but before doing so we should see if our money could be earning better returns elsewhere. For example, if you can get 8% on an investment, thereâ€™s no point cashing it in to save the 5% you’re paying on your mortgage.

Mortgage lending is competitive business and that’s good news for borrowers. Don’t sign up for the first deal you come across. Shop around, comparing rates and terms. One of the biggest decisions is between fixed and variable rates. This is a hard call as no one can predict what’s going to happen even a few months ahead – not governments, not the best qualified economists – so don’t believe anyone that says they can. Be guided by your own instinct, but be prepared to make a change if a better deal becomes available.

Be sure to read the small print. Often mortgages with the most attractive rates come with expensive up-front charges, exit charges, or both. Or there may be penalties for early repayment. These don’t necessarily invalidate the benefits offered by the lower rates, but make sure you build them into your assessment. If the up-front charge is a fixed amount then it’s usually more beneficial the more you borrow – ie the savings will be more on bigger repayments.