{"id":283832,"date":"2025-11-10T19:54:10","date_gmt":"2025-11-10T19:54:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/283832\/"},"modified":"2025-11-10T19:54:10","modified_gmt":"2025-11-10T19:54:10","slug":"50-year-mortgage-rate-would-add-about-86-more-interest-over-life-of-loans","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/283832\/","title":{"rendered":"50-Year Mortgage Rate Would Add About 86% More Interest Over Life Of Loans"},"content":{"rendered":"

President Donald Trump\u2019s idea to introduce a 50-year mortgage rate is being picked apart by housing and economics experts, who have expressed skepticism over how impactful such a move would be in improving affordability for millions of Americans currently struggling to get on the property ladder.<\/p>\n

Trump first floated the idea over the weekend, sharing a graphic on his social media platform Truth Social where his portrait was side-by-side with that of Franklin D. Roosevelt under a banner reading: \u201cGreat American Presidents.\u201d Under Roosevelt\u2019s portrait, the graphic said \u201c30-year mortgage,\u201d which the then-president introduced during the 1940s. Under Trump\u2019s portrait, it said \u201c50-year mortgage.\u201d<\/p>\n

Shortly after, the Trump-appointed director of the Federal Housing Finance Agency (FHFA) William Pulte confirmed on X that the Trump administration was considering introducing a 50-year mortgage as a \u201ccomplete game changer\u201d for affordability in the U.S. housing market.<\/p>\n

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Housing costs have skyrocketed in the years following the outbreak of the pandemic, and mortgage rates have hovered between 6 percent and 7 percent since 2022, chipping away at Americans\u2019 purchasing power.\u00a0<\/p>\n

Introducing a 50-year mortgage could help individuals and families facing higher borrowing and homeownership costs, but experts warn that any benefit could be easily outweighed by dragging on payments for 20 years longer than the standard 30-year term.<\/p>\n

What Is The Point Of Introducing A 50-Year Mortgage?<\/p>\n

The appeal of a 50-year mortgage \u201cis to offer lower monthly payments to homebuyers and break up the log jam of the current housing market which has struggled in terms of sales pace all year,\u201d Joel Berner, senior economist at Realtor.com, told Newsweek.<\/p>\n

But experts are skeptical of what its impact would be on the U.S. housing market over time, and many have been vocal in their criticism of the proposal, with CEO of American investment firm Azoria James Fishback calling it \u201ca disgusting insult\u201d and \u201ceconomic genocide against the Gen Z generation.\u201d<\/a><\/p>\n

\u201cThe drawbacks are that a 50-year mortgage results in almost double the interest payments of a 30-year mortgage and a longer path to meaningful home equity,\u201d Berner said, \u201cand that the result of subsidizing home demand without increasing home supply could be an increase to home prices that negates the potential savings.\u201d<\/p>\n

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The design of the Trump administration\u2019s proposal is to boost homebuyer demand, Berner said, which has been \u201csubdued\u201d for the last several years as mortgage rates have been stuck in the 6+ percent range. But an unwanted consequence might be to make homeownership even more expensive for Americans.<\/p>\n

\u201cMore flexible financing is essentially a subsidy for housing demand, which will add to the pool and buying power of homebuyers without increasing the supply of homes,\u201d Berner said. This, in turn, \u201cwill drive home prices up,\u201d he warned.\u00a0<\/p>\n

\u201cThe \u2018savings\u2019 from 50-year mortgages may be totally negated by rising home prices,\u201d Berner said.<\/p>\n

How Would The Trump Administration Go About This?<\/p>\n

Bankrate Housing Market Analyst Jeff Ostrowski told Newsweek that, presumably, the FHFA could direct Fannie and Freddie to begin offering 50-year loans, and lenders could begin originating them.\u00a0<\/p>\n

But questions remain over how the Trump administration would concretely implement such a change\u2014something that both the president and the FHFA director have offered very little information about.<\/p>\n

\u201cOne big question is how investors would react,\u201d Ostrowski said. \u201cMost mortgages are re-sold to investors, and this would be a new product,\u201d he added.\u00a0<\/p>\n

\u201cAnother question is how much higher mortgage rates would be on 50-year loans. Rates would have to be somewhat higher for lenders and investors to accept the risk.\u201d<\/p>\n

What Would Be Its Impact On Borrowing Costs?<\/p>\n

According to Berner, rates would be higher on the 50-year loan \u201cin the same way that 30-year rates are higher than 15-year rates,\u201d he said. \u201cThe longer the life of the loan, the more compensation the lender will demand.\u201d<\/p>\n

With those assumptions\u2014and the additional assumption of a 6.25 percent rate\u2014, a 50-year loan would save \u201cat most\u201d about $250 per month compared to the 30-year loan, Berner estimated.\u00a0<\/p>\n

\u201cI say \u2018at most\u2019 because I assumed the same rate for both, which would probably not be the case,\u201d he said. \u201cTotal interest on the 50-year loan would amount to $816,396 compared to $438,156 on the 30-year loan, a difference of $378,240. That\u2019s 86 percent more interest over the life of the loans,\u201d he said.\u00a0<\/p>\n

\u201cAfter 10 years of homeownership you\u2019d have $345,564 as a balance on your 50-year loan compared to $303,256 on the 30-year. That\u2019s a difference of $42,308 or 10.6 percent of the value of the home,\u201d Berner said.<\/p>\n

Ostrowski agrees that the savings made possible by a potential 50-year mortgage would be rather small.\u00a0<\/p>\n

\u201cA 50-year loan would just extend the repayment period,\u201d he told Newsweek. \u201cSay I take a $400,000 loan at 6.25 percent for 30 years. The monthly payment would be $2,463. If you were to extend that term to 50 years and raise the rate to 7 percent, the monthly payment falls to $2,407,\u201d he estimated.\u00a0<\/p>\n

This would make the loan \u201ca little more affordable,\u201d he said, \u201cbut are 10 lattes a month really enough to motivate a borrower to extend the repayment period?\u201d\u00a0<\/p>\n

According to Ostrowski, Trump\u2019s proposal would be \u201ca minor shift rather than a monumental one.\u201d<\/p>\n

For Berner, introducing a 50-year mortgage rate \u201cis not the best way to solve housing affordability.\u201d The Trump administration, in his opinion, \u201cwould do better to reverse tariff-induced inflation, which is keeping the rates on existing mortgages high, and to encourage the expansion of housing supply by promoting homebuilding,\u201d he added.<\/p>\n

\u201cBuyers do benefit from spreading out the high cost of a home purchase over a longer period, but lenders certainly benefit too by having a longer period to charge higher interest rates.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"President Donald Trump\u2019s idea to introduce a 50-year mortgage rate is being picked apart by housing and economics…\n","protected":false},"author":2,"featured_media":283833,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[149953,28,12,101,2053,5456,5412,9399,3657],"class_list":["post-283832","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-50-year-fixed-rate-mortgage","tag-business","tag-donald-trump","tag-economy","tag-housing","tag-housing-market","tag-mortgage-rates","tag-mortgages","tag-u-s-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/283832","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=283832"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/283832\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/283833"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=283832"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=283832"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=283832"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}