50-Year Mortgages Are a Horrific Idea

hotair.com

I have yet to hear a single financial advisor suggest that extending the period for debt is a good idea. 

That's because it is not. It is the opposite of a good idea. The longer it takes to pay off a loan, the higher the interest rate payments you will be making. 

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It's simple math. You pay interest on the outstanding balance, accumulating interest over time. The longer the loan is outstanding and the less of the principal you pay off, the more interest you will ultimately pay. The interest you pay can exceed the value of the original loan by quite a large margin. 

That's why President Trump's proposal to offer 50-year mortgages in addition to the standard 30-year variety has landed with a thud. 

Here's the reality of the 50-year mortgage:

The average homeowner moves every 9-10 years

Most refinance 1-2 times before that

The real impact isn't total interest paid. It's equity lost during ownership.

$400k loan at 7%, after 10 years:

30-year mortgage: $52k principal paid 50-year mortgage: $20k principal paid

Difference: $32,000 in lost equity

That's not theoretical. That's your next down payment.

The monthly payment drops $328. But you're still paying interest on the $32k you didn't pay down.

When you sell, you walk away with $32k less. Your next mortgage starts deeper in debt.

The structural problem:

Lower payments increase buying power → Home prices adjust upward → Affordability unchanged → Equity accumulation permanently reduced

This isn't about making housing accessible. It's about extending debt duration while slowing wealth building.

For first-time buyers struggling with affordability, a 50-year mortgage trades short-term payment relief for long-term financial stagnation.

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I am horrific with math, so I asked Perplexity.ai to do it for me, assuming that you buy a home and intend to live in it forever. The math is horrific:

For a $400,000 loan, the difference in total interest paid between a 30-year and a 50-year mortgage is substantial, with the 50-year loan resulting in much higher interest costs over the life of the loan.

Interest Rates and Assumptions

  • As of November 2025, the average 30-year fixed-rate mortgage is around 6.2% to 6.3%.

  • Estimates for a 50-year mortgage suggest the rate would be 0.42 to 0.57 percentage points higher, landing around 6.64% to 6.79% for a 50-year term.

    • Example of Interest Paid

  • 30-Year Loan at 6.22%: Total interest paid over 30 years for a $400,000 loan would be approximately $483,000.

  • 50-Year Loan at 6.64%: Total interest paid over 50 years for the same loan would be close to $980,000—about half a million dollars more than the 30-year loan.

    • Comparison TableLoan TermInterest RateTotal Interest PaidDifference vs 30-Year
    30 Years6.22%$483,000​—
    50 Years6.64%$980,000​+$497,000
    Key Takeaways

  • Monthly payments on a 50-year loan would be lower, but the total interest bill would nearly double compared to a 30-year loan of the same size.

  • Choosing a 50-year mortgage means trading short-term affordability for much higher long-term costs and slower equity accumulation.

    • That's not a good deal. That 's almost debt peonage. You might as well just rent. At least you wouldn't have to maintain the home on top of everything else. 

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    Obviously the goal of this plan is entirely political, and based on the assumption that people are so eager to buy and so financially illiterate that they will be happy to sacrifice the long-term benefits of paying off your mortgage as quickly as possible for the short-term benefit of having a lower monthly payment. 

    It's almost "you will own nothing and be happy" territory. The people who own your debt get a nice, nearly guaranteed source of income (or will be able to get your home at a nice discount if you default, after having collected a ton of interest), while you accumulate next to no equity in the near to medium term because all you are paying is interest on the debt. 

    Great. Not only are the federal government, most states, and municipalities building up debt to spend now and pay later, but even more American citizens will see their income bleed away without building up for the future. 

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    At least there is Social Security. That's a relief!

    The big winners out of this plan would be lenders, and perhaps some builders in the short term, but how is that different from private equity buying up housing stock to rent? 

    Sorry, but I can see no world where this is a good deal. To me, it looks more like a political Hail Mary with the hope that disenchanted younger people who feel left out of the housing market are stupid or desperate enough to take the deal, thank President Trump, and hopefully get through the next election with minimal damage. 

    There is no one solution to housing affordability, but I can think of a number of policy solutions that will make a difference. You can relieve some of the strain on housing supply by reversing the huge influx of illegal aliens, whose demand for housing is sucking up supply and increasing prices, reduce the regulatory burden that impedes homebuilding, or even go forward with the plan that Trump floated for "Freedom Cities" built on federal land with fewer regulations, built by private entities, with experiments in new urban plans. 

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    Will that work? I don't know. What I do know is that 50-year mortgages are a horrible way to go. 

    They also are not very MAGA. Trump at his best proposes big and bold programs with stretch goals that seem impossible, but usually come to pass. 50-year-mortgages are the opposite of that, in my humble opinion. 

    Imagine sending your last mortgage payment at 84 years old. That’s what a 50-year loan looks like.

    Here’s why 50-year mortgages are a terrible idea:

    1. You’ll be in debt for life. You’d spend five decades paying for the same house.

    2. You’ll pay a fortune in interest. A 50-year loan adds up to around $690,000 in interest — over half a million more than a 15-year loan.

    3. You build equity painfully slow. On that $1,684 payment, only $533 actually goes toward the house.

    4. You’ll still have a mortgage in retirement. At 84, you should be free, not sending checks to the bank.

    5. It keeps you stuck longer. You can’t move, upgrade, or invest because you’re locked in for life.

    6. It helps the bank, not you. The longer the loan, the more they make, and the longer you stay broke.

    A 15-year mortgage gets you debt free faster, saves you hundreds of thousands in interest, and helps you actually own your home, not just pay for it forever.

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    Am I wrong about this? I am happy to be corrected if I am. I want to trust President Trump and am inclined to give him the benefit of the doubt. 

    However, I am not inclined to applaud like a trained seal when something smells fishy.