While payments shrink, homeowners would build equity more slowly and pay nearly 40% more in total interest
President Donald Trump recently proposed a 50-year mortgage on Truth Social to make homes more affordable. The Federal Housing Finance Agency (FHFA) said it’s exploring the idea, calling it a potential game-changer.
How does it differ from 30-year loans?
The key advantage of a 50-year mortgage is lower monthly payments. For instance, on a median-priced home of $415,200 at a 6.3% interest rate, a 30-year mortgage costs $2,056 per month, while a 50-year loan reduces it to $1,823, saving $233 per month.
However, borrowers would build equity more slowly and pay nearly 40% more in total interest, leaving banks to benefit more from long-term interest accumulation.
Regulatory and market hurdles
Currently, 50-year loans don’t meet the “qualified mortgage” standard under the Dodd-Frank Act, meaning lenders lack federal protection if borrowers default.
Analysts say Congress would need to approve rule changes—a process that could take up to a year. Until then, lenders are unlikely to issue such long-term loans.
Impact on home buyers and the market
Experts warn that savings from extended loans are minimal compared to the higher overall costs.
Since there’s no active secondary market for 50-year loans, interest rates could climb further.
Economists argue that real affordability should stem from boosting housing supply and lowering construction costs, rather than extending loan terms.