I’m a Real Estate Expert: Here’s Why I Think Trump’s 50-Year Mortgage Idea Won’t Work
Written by
Vance Cariaga
Edited by
Rebekah Evans
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President Donald Trump recently floated the idea of a 50-year mortgage as a way to lower monthly mortgage payments and make home ownership more affordable.
Although the 50-year mortgage is not a new idea, it has taken on greater meaning in the current housing market. Home prices remain near all-time highs and even though mortgage rates have come down, they’re also much higher than only a few years ago, according to Macrotrends.
A 50-year mortgage would lower monthly payments because loans are spread over a much longer period of time versus the standard 30-year mortgage. But is it a good idea? Not everyone thinks so.
Here are four reasons a 50-year mortgage won’t work, according to real estate experts.
Most Homeowners Will Never Pay It Off
One of the biggest problems cited by experts is that the vast majority of homeowners will never pay off a 50-year mortgage simply because they won’t live long enough.
The median age of first-time homebuyers in 2025 is 40 years old, according to new research from the National Association of Realtors (NAR). That’s the highest it has ever been. Meanwhile, the Centers for Disease Control estimates that the average life expectancy in the U.S. is 78.4 years.
Given those numbers, most homeowners won’t reach the age when they can pay off a 50-year mortgage. Even if they do, they could find themselves in dire financial straits, according to Michael Micheletti, chief communications officer at Unlock Technologies, a provider of home equity agreements.
“A couple in their mid-30s who enter into a 50-year mortgage agreement would be paying this off into their 80s,” Micheletti said. “That is problematic given that the vast majority of homeowners will be well past income-earning years at that point. It’s likely people will not have saved enough to continue making their payments in those years, yet alone have enough money to cover essential living expenses and healthcare costs.”
However, others point out that most homeowners don’t live in their homes for the duration of the mortgage, anyway.
“The 50-year mortgage is not about living in the same house for 50 years. There are other considerations that the entire ecosystem benefits from [such as lower mortgage payments],” said Arie Brish, business/technology executive, real estate investor, author and business professor at St. Edward’s University.
It Will Take a Long Time To Build Equity
A major benefit of shorter-term mortgages is that you build up equity faster. That’s because more of your monthly payment goes toward principle rather than interest. But you won’t have that advantage with a 50-year mortgage.
“With a 50-year mortgage, that equity is not going to be available for a very, very long time,” Micheletti said. “The loan is amortized over a much longer period of time, so very little of each monthly payment goes toward paying down the principal balance — and a much larger portion of each payment goes toward interest. They will be much further ahead with a HELOC, home equity loan or home equity agreement.”
It Could Drive Up Home Prices
The idea behind a 50-year mortgage is to make home ownership affordable to more people. However, it could have the opposite effect, according to Todd Drowlette, real estate developer, investor and star of A+E Network’s “The Real Estate Commission.”
“Widespread adoption would arguably make the [affordability] problem worse,” Drowlette said. “The housing market is based on supply and demand and prices are set at the most buyers are willing to pay for a home. If 50-year mortgages drop buyers’ potential monthly payments, then you will have more buyers competing for the same house that can ‘afford’ it, which will drive up prices even higher.”
It Could Lead To Another Housing Crisis
Jeff Lichtenstein, CEO and broker at Florida-based Echo Fine Properties, called 50-year mortgages “so 2006” — a reference to the housing crisis and mortgage crisis that contributed heavily to that decade’s financial meltdown and Great Recession.
One problem back then was that lenders lowered their standards and approved home loans for millions of Americans with poor credit.
“We’ve lived that nightmare before and the 50-year mortgage is a step toward going down that path,” Lichtenstein explained. “If the housing market drops, you’ll see more people not be able to escape their homes because they don’t have any equity saved. If an emergency payment comes or when they truly need the equity to retire or pay for needed capital expenditures like a new roof, the money will not be there. It’s a short-term gain with terrible long term consequences.”
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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