As mortgage rates saw little shifts during this past week, President Donald Trump and members of his administration have floated an idea to galvanize new homebuyers: the 50-year mortgage. In a post on Truth Social, Trump shared a photo comparing the proposal to how President Franklin D. Roosevelt introduced the federally backed 30-year mortgage during the New Deal.
In an X post made on Nov. 8, Federal Housing Finance Agency (FHFA) Director Bill Pulte stated: “Thanks to President Trump, we are indeed working on the 50 year Mortgage—a complete game changer.”
The plan has created much discussion, both criticism and questions on if paying over a longer period of time would actually alleviate affordability issues; as the borrower is holding the loan for much longer, more interest will accrue on it even if the principal of the loan is unchanged from a 30-year mortgage.
Even within the administration, a 50-year mortgage offering doesn’t have unified support, as Joe Lavorgna, counselor to Treasury Secretary Scott Bessent, said in an appearance on The Hill that the 50-year mortgage is “probably not an optimal solution.”
Reporting by CBS claimed that some White House officials were unsatisfied with the proposal, also suggesting Pulte is the main proponent of introducing the 50-year fixed-rate mortgage and Trump himself is “lukewarm” on it. However, in an interview on Fox News, Trump himself defended the idea of a 50-year mortgage.
“It’s not even a big deal,” Trump said, initially claiming “you go from 40 to 50,” before interviewer Laura Ingraham corrected “30 to 50.” (40-year fixed-rate mortgages do exist, but are less common than the 30-year fixed-rate mortgage.) “All it means is you pay less per month, you pay it over a longer period of time.”
In a public statement, Realtor.com® Chief Economist Joel Berner laid out the arguments for and against the 50-year mortgage.
“The appeal of the 50-year mortgage is to offer lower monthly payments to homebuyers and break up the log jam of the current housing market which has struggled in terms of sales pace all year,” Berner said. “The drawbacks are that a 50-year mortgage results in almost double the interest payments of a 30-year mortgage and a longer path to meaningful home equity, and that the result of subsidizing home demand without increasing home supply could be an increase to home prices that negates the potential savings.”
However, Berner declared bluntly that the 50-year mortgage is “not the best way to solve housing affordability,” instead arguing the administration should focus on expanding housing supply and reducing “tariff-induced inflation” to better housing affordability.
“Rates would be higher on the 50-year loan in the same way that 30-year rates are higher than 15-year rates. The longer the life of the loan, the more compensation the lender will demand,” Berner said while explaining the nuts and bolts finances of a 50-year mortgage, calculating it would save borrowers “at most” about $250 a month.
“Buyers do benefit from spreading out the high cost of a home purchase over a longer period, but lenders certainly benefit too by having a longer period to charge higher interest rates,” Berner concluded.
Not all feedback has been so negative. Phil Crescenzo Jr., vice president, southeast division at Nation One Mortgage Corporation, said in emailed comments that the 50-year mortgage could indeed improve housing affordability.
“I feel like anything that opens more doors has benefits and is at least a conversation starter,” said Crescenzo, noting that “lower payments during tighter months” could be a helpful change for some borrowers. “Considering that most homebuyers are going to change financing well in advance of that 50-year term, it could be a door opener for some. The overall interest should be factored in, of course, but also consider the time the mortgage would be held by that homeowner.”
The biggest risk of the proposal for homeowners, Crescenzo claimed, is “paying little into equity vs. interest in extending the term longer. Potential new homeowners may not be focused on this, or know to pay attention.”
As the 50-year mortgage proposal continues to be debated, it is not the only idea the White House is considering. For instance, Pulte has confirmed that the administration is also “evaluating” portable mortgages, or letting a homeowner transfer their mortgage to a new property rather than taking out an entirely new loan at a new rate. The increase in mortgage rates relative to the pandemic era rates has seen a “lock-in” effect, or people reluctant to move and take on a higher monthly rate.
The idea of a 50-year mortgage has recently been floated in at least one other country, but did not pass. In 2022, the UK Parliament considered allowing for 50-year mortgages that pass from one generation to the next, which highlights another issue of the idea: the possibility the borrower may not live to see the completion of the mortgage, or to ever own the house in full after paying it off.
