What the Torah Really Says About Interest, Debt, and Mortgages

Have you ever heard of a “Spitzer calculator”? If you think it sounds like something from a high school math class, that’s actually a good sign — it probably means you’ve never had to take out a mortgage.

A Spitzer calculator is the standard system used to calculate the interest you will pay on your home over the coming years. In other words, it is not exactly enjoyable reading. After all, for many years, we essentially become servants to the bank.

In this week’s Torah portion, the laws of interest appear right next to the mitzvot of the Sabbatical year (Shemitah) and the Jubilee year (Yovel). Why are these ideas connected?

In a sense, Shemitah and Yovel are the Torah’s version of a positive repayment schedule. The laborer crushed under exhausting work, the person forced to sell his home or land, the debtor struggling beneath financial obligations — all of them look toward the Torah’s “payment calendar,” waiting for the seventh year, and even more so the Jubilee year, when debts are released, land returns to its owners, and freedom is restored.

That is precisely why these mitzvot are linked to the prohibition against charging interest.

The Danger of Endless Debt

The problem with interest is that it constantly grows. A person spends years paying more and more — on a house, a car, credit card payments, and endless financial obligations. The system is often designed so that the customer remains indebted indefinitely, with payments continuing well into old age. It can become a form of modern slavery with no clear escape.

The Torah opposes this kind of permanent financial bondage. It wants there to be a path out of poverty and dependence.

This idea also explains a fascinating law regarding tithes. One of the agricultural tithes is called Maaser Ani — the “poor man’s tithe” — where people give ten percent of their produce to the poor. It sounds beautiful, and it is. Yet surprisingly, the Torah only commands this in certain years of the Shemitah cycle. During other years, a different tithe, Maaser Sheni, is brought to Jerusalem and eaten there in holiness.

Why not simply give to the poor every year?

Because the Torah does not want poverty to become a permanent identity. It does not want a person to grow accustomed to dependency or become trapped in a culture of endless handouts. The years of Maaser Ani provide support and dignity, helping a struggling person regain stability. At the same time, he is expected to continue building, working, and eventually standing on his own feet again.

The same is true of the Sabbatical year. It is a tremendous relief for the poor, but it is not intended to become a permanent lifestyle. After Shemitah ends, ordinary life resumes, and people return to productive work and responsibility.

Charity Is Great — But Empowerment Is Greater

The Torah recognizes that poverty will always exist to some degree. “There will never cease to be needy people in the land,” the Torah says. Because of this, charity remains one of Judaism’s greatest mitzvot.

But Judaism’s ultimate goal is not merely to create more recipients of charity.

The Maimonides famously writes that the highest form of charity is helping a person become financially independent — giving a loan, creating a partnership, or helping someone start a business so they can support themselves with dignity.

This idea also explains the modern halachic mechanism known as Heter Iska, which allows banks to operate within Jewish law.

The core concern behind the Torah’s prohibition against interest is exploitation. If a desperate person cannot afford bread and takes a loan, then later must repay double, the lender is effectively profiting from another person’s suffering. This resembles the frightening world of predatory lending and exploitative debt systems.

The Torah therefore commands that if someone truly needs help, a person with money should lend without interest. They may take reasonable precautions — guarantors, security checks, lending only to trustworthy people — but not profit from another’s desperation.

Modern banking, however, often functions differently. A mortgage is generally not about survival bread for tomorrow. It is frequently part of a business arrangement or long-term investment. A person may want to purchase an apartment, rent it out, and generate income, but lacks the millions needed upfront. In that case, the bank is not simply exploiting poverty; rather, it becomes a financial partner sharing in the profits and risks of the venture.

That is the underlying idea behind Heter Iska: transforming a loan relationship into a form of business partnership rather than a system built on exploiting human need.