As for cost effectiveness... Let's say you're looking at a $150,000 house with an 8% mortgage for 20 years. 10% down payment.

In the US, the interest payment on a mortgage is deductible from your taxable income (IANATA). In the first few years of a mortgage, payments are almost entirely interest and thus almost entirely tax deductible, so that your $1025 per month results in about a $12,000 reduction in taxable income. If a home buyer is paying about 30% in state and federal income taxes, that's about $3600 in taxes not paid, so the $1025 monthly mortgage payment is effectively reduced to $725 for the first several years. The tax code is extremely biased towards home ownership.

-jk