President Donald Trump and administration officials signaled that they’re planning to develop a 50-year mortgage that they think could expand access to homeownership, though experts are cautioning the longer-term mortgages could hamstring homebuyers.
Trump on Saturday posted on his Truth Social platform with a graphic showing pictures of “Great American Presidents” including Franklin D. Roosevelt, who was in office when the 30-year mortgage was popularized, and himself to suggest he will develop a 50-year mortgage.
Federal Housing Finance Agency Director Bill Pulte added in a post on X that, “Thanks to President Trump, we are indeed working on The 50 year Mortgage – a complete game changer.”
Financial industry experts responded to the 50-year mortgage proposal with skepticism, noting it would likely come with a higher interest rate than a traditional 30-year mortgage and the longer duration would increase the cumulative interest paid by borrowers.
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Joel Berner, senior economist at Realtor.com, noted that while the appeal of the plan is to “break up the log jam” in the housing market, which has seen sluggish sales this year, there are significant downsides for buyers under the proposal and the “‘savings’ from 50-year mortgages may be totally negated by rising home prices.”
“The 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, and that the result of subsidizing home demand without increasing home supply could be an increase to home prices that negates the potential savings,” Berner said.
He said that assuming a 6.25% rate on both a 50-year mortgage and a 30-year mortgage – which he noted is unlikely as the longer duration loan would have a higher rate and more interest costs – total interest on the 50-year loan would be $816,396 as compared with the 30-year loan’s interest of $438,156.
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David Bahnsen, the founder, managing partner and chief investment officer of The Bahnsen Group, told FOX Business that a 50-year mortgage would exacerbate affordability issues with higher interest costs over the life of the loan.
“The major issue with affordability is the down payment and the interest rate. A 50-year mortgage would not change the requirement of a down payment, and interest rates for longer-maturity debt are higher than they are for shorter-maturity debt,” Bahnsen said.
“Stretching the payment out an extra 20 years would lower the monthly payment but only by making the total cost of borrowing over time way, way, way higher. And of course, to the extent a longer maturity mortgage lowers the monthly payment, this gets priced into the sticker price of the home and makes affordability worse, not better,” he said.
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Bahnsen added that “banks would love it as the total interest paid would be dramatically higher with such a longer amortization period,” and said that a better way to address housing affordability would be to expand the construction of housing by easing regulatory burdens related to zoning and permitting.
Pulte on Sunday responded to criticism over the proposal on social media, saying on X, “We hear you. We are laser focused on ensuring the American Dream for YOUNG PEOPLE and that can only happen on the economic level of homebuying. A 50 Year Mortgage is simply a potential weapon in a WIDE arsenal of solutions that we are developing right now. STAY TUNED!”
He later said that the Trump administration is also “working on ways to give relief in the 5 year mortgage, the 10 year mortgage, and the 15 year mortgage.”
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