President Donald Trump recently introduced a concept that has caught the attention of real estate professionals and economists: a 50-year mortgage. Over the weekend, Trump posted a graphic on Truth Social, portraying himself alongside historical figures in American housing policy, notably linking himself to the 30-year mortgage initiated under President Franklin D. Roosevelt in the 1940s.
Experts note that while a 50-year mortgage could ease monthly payments for buyers, it would come with significant costs in the long run, primarily due to high interest rates over an extended repayment period. At present, the feasibility and popularity of such a mortgage scheme remain uncertain.
Following Trump’s online announcement, Bill Pulte, head of the Federal Housing Finance Agency (FHFA), confirmed on X that the administration is pursuing the notion of a 50-year mortgage, describing it as a “complete game changer.” The FHFA supervises Fannie Mae and Freddie Mac, which play key roles in the U.S. mortgage market by guaranteeing nearly half of all home loans.
A White House official emphasized that Trump is continually seeking innovative ways to enhance housing affordability for average Americans, but noted that any formal policy adjustments would be publicly disclosed through official channels. Additionally, an FHFA spokesperson stated that various multi-year loan options, including the possibility of making mortgages portable, are under consideration, highlighting a drive for more flexibility in home financing.
Economically, a 50-year mortgage could provide lower payments for potential buyers. For instance, if a home costs $400,000 with a 10% down payment at a 6.25% interest rate, monthly payments could drop from approximately $2,300 on a 30-year plan to around $2,000 on a 50-year loan. However, challenges exist as longer loan terms typically carry higher interest rates.
Despite the attractive monthly payment appeal, potential drawbacks abound. Buyers would ultimately pay significantly more interest—about $816,396 on a 50-year mortgage compared to $438,156 on a 30-year loan, representing an 86% increase in interest costs. This structure can hinder equity buildup, with homeowners under a 50-year loan only gaining a 14% stake in a home after ten years, as opposed to 24% with a 30-year loan.
Industry analysts have pointed out that while this concept is an inventive attempt to address housing affordability, it does not tackle the core issues, such as the need for more construction to meet housing demand. Some experts believe that implementing a 50-year mortgage would involve considerable regulatory changes, particularly in light of restrictions outlined in the Dodd-Frank Act, which defines qualified mortgages as those no longer than 30 years.
The road to introducing a 50-year mortgage could be lengthy and complex, requiring collaboration among regulators and industry participants. As discussions continue, it remains to be seen how younger generations will respond to these concepts and whether they will view them as viable solutions to today’s housing challenges.