President Donald Trump’s new proposal to create a 50-year mortgage — pitched by his administration as a way to lower monthly payments and help more Americans afford a home — is drawing swift skepticism from economists and housing analysts who say the plan could leave buyers paying far more over time while pushing home prices even higher.
The administration offered few specifics about how such long-term loans would be structured. Federal Housing Finance Agency Director Bill Pulte called the concept transformational, arguing that spreading payments over 50 years could reduce monthly costs for first-time buyers who are squeezed by high interest rates and record home prices.
But experts caution that lower monthly bills may come with substantial long-term costs. A 50-year mortgage at current interest rates would dramatically increase the total interest paid over the life of the loan. On a $450,000 home at 6.25%, the payment could drop by a few hundred dollars per month compared with a 30-year mortgage — but total interest would exceed $1 million, nearly doubling the cost of borrowing.
Economists warn that stretching loans to half a century would slow equity building to a crawl, leaving borrowers vulnerable to downturns and at greater risk of owing more than their homes are worth. They also note that the proposal could inflate demand without increasing housing supply, driving prices even higher.
There are also legal and financial hurdles. The Dodd-Frank Act caps mortgage terms at 30 years, meaning a 50-year mortgage would require congressional action. Analysts say lenders would likely charge higher interest rates due to increased default risk and the challenge of modeling borrower behavior over such extended periods.
Supporters argue that a 50-year loan could still help renters who otherwise cannot break into the market, especially if borrowers later refinance into shorter terms. Critics counter that the approach avoids the root problem: a severe shortage of homes in the areas where people want to live.
The White House has not outlined a timeline or legislative strategy, but officials say the idea is part of broader efforts to address housing affordability.
Source: CNN