President Donald Trump and his administration are exploring a plan for a 50-year mortgage aimed at making homeownership more accessible. However, some experts have raised concerns that these longer-term loans could create more problems than they solve for prospective buyers.
On a recent post on Truth Social, Trump highlighted images of himself alongside notable presidents, suggesting that this new mortgage initiative would follow in their footsteps. Bill Pulte, the director of the Federal Housing Finance Agency, affirmed this effort, calling it a “complete game changer.”
Despite this enthusiasm, financial experts warn that a 50-year mortgage might carry a higher interest rate compared to the standard 30-year option, resulting in greater overall costs for borrowers. Joel Berner, a senior economist at Realtor.com, pointed out that while the intention is to stimulate the housing market, the potential drawbacks—like increased interest payments—could offset any savings.
For instance, if both mortgage options had a similar interest rate of 6.25%, the total interest paid on a 50-year loan could reach approximately $816,396, significantly more than the $438,156 on a 30-year mortgage. This difference highlights the extra costs that would come with a longer repayment period.
David Bahnsen, chief investment officer at The Bahnsen Group, echoed these concerns, stating that while the idea may lower monthly payments, the total expense of borrowing would be much higher over time. He emphasized that the main barriers to affordability, such as down payments and interest rates, would remain unchanged. Stretching mortgage terms could, in effect, worsen the affordability crisis by raising home prices.
In response to criticism, Pulte stated that the administration aims to offer a variety of mortgage solutions, including options with shorter terms, all designed to support the American Dream of homeownership, especially for young people. However, many experts believe that real progress could be made by fostering increased housing construction through regulatory reforms related to zoning and permitting.
As discussions around the 50-year mortgage continue, it remains to be seen whether this proposal will successfully navigate the complexities of the housing market or merely add to the challenges facing potential homebuyers.
