A few days ago, President Trump shared the idea of a 50-year mortgage, and it has set the housing narrative on fire to say the least. Let’s talk about this today without getting political, and I also have a big market update with stats for ten counties. Skim quickly or digest slowly.
UPCOMING SPEAKING GIGS:
12/9/25 Downtown Regional MLS Meeting
12/10/25 SAFE Credit Union (TBA)
1/13/26 Residential RoundUp via Zoom (register here)
1/14/26 Windermere EDH / Placerville
2/11/26 San Joaquin County presentation (TBA)
2/20/26 PCAR
3/25/26 Coldwell Banker EDH
4/14/26 Culbertson & Gray
10/2/26 PCAR
50 YEAR MORTGAGES: WHY I’M TALKING ABOUT THIS
I was talking about the fifty-year mortgage this weekend, and someone told me he was disappointed. I think the perception was that I was being anti-Trump because of my opinion, but real estate and politics collide sometimes. Besides, show me any place where housing is being discussed and this topic is not coming up. A few weeks ago I wrote about a tax on the highest prices in Sacramento, so was I attacking liberal policy then? In April 2021, I said mortgage rates were too low, and I suppose that could be interpreted as political. In fact, a loan officer unsubscribed and called me woke. Look, my goal is to talk about anything that can affect the housing market, and I’m hopeful we can have conversation without getting political.
MY THOUGHTS ON A 50-YEAR MORTGAGE
Here’s my take. A fifty-year mortgage can work for some people, but I’m not a fan overall for the general public since this doesn’t do anything meaningful for affordability as it’s a product that can help keep prices higher. This feels like a Band-Aid rather than a solution, and I would much rather see politicians talk about how to unlock supply rather than increase demand or debt. This essentially helps buyers purchase at higher prices today, so it seems like a product that actually favors sellers way more than buyers. I’m concerned about consumers being tied to debt longer and first-time buyers in particular having very little equity after a decade of living in the home (see an amortization calculator). Look, if the market appreciates over time, then maybe less equity is no big deal, but if it doesn’t, that’s problematic. Ultimately, the monthly savings look negligible with a fifty-year mortgage, so it doesn’t feel like a viable solution for the masses. Could it work for some? Of course. Is it good if we have more options in the housing market? Maybe. But we need the right type of policy. Not just any policy. I am all for stirring more housing demand, but not at any cost. Imagine if we brought back all the loans happening before the housing bubble burst. That would absolutely create more demand, but it wouldn’t be a reasonable way forward. This goes to show that we want the right policy. Not any policy.
What do you think? What are the positives and negatives? I’d love to hear in the comments. And please keep it civil and argue about politics elsewhere.
FIVE THINGS TO KNOW ABOUT THE HOUSING MARKET
1) PRICES CONTINUE TO BOUNCE AROUND
Price stats remind me of Nintendo cheat codes from the ’80s. Prices are up, down, up, down, flat, etc…. For Nintendo, you could get thirty lives in the game Contra if you pressed, “Up, Up, Down, Down, Left, Right, Left, Right, B, A, Start.”
2) THE MARKET IS SOFT, BUT NOT AS SOFT
We’ve had a clear pattern of more sellers coming to the market over the past couple of years, but not so much over the two quarters. Some people look at the decline and call it seasonal, which I understand, but it’s more than that. We were consistently outpacing 2024 during the beginning of the year, and now we’re not. My thesis is sellers have backed off due to economic uncertainty. Whatever the reason, this is why the market feels soft, but not as soft as it did months back when supply was really growing. I’m not saying it’s aggressive out there, but it’s not as dull.
3) SALES ARE JUST AHEAD OF LAST YEAR
The number of sales is just ahead of one year ago. I think we can give this a light golf clap and be thankful for slightly more, but otherwise let’s be real that we’re having a lackluster year of closed sales. I’m not being negative, but realistic. I did a reel about this where I talked about what it’s like emotionally to work in real estate. Friends, put your game face on, position yourself for the market that is here, and be logical that we’re poised to continue to have low volume until we see a sharper change to affordability.
4) IT’S HIBERNATION TIME VERY SOON
Sellers and buyers start to hibernate around the holidays as December is almost always the low point for the number of new listings, pendings, and closed sales (sales bottom in January, but these homes got into contract in December). Anyway, it’s important to be in touch with the seasonal rhythm so we can know what to expect and spot anything abnormal. For buyers, be looking for listings that come to the market at this time of year because sellers are sometimes willing to deal. By the way, this doesn’t mean the market is completely dead for the rest of the year either, so save your hate mail. All I’m saying is we’re about to see the low point of supply and demand for the seasonal market.
5) A GOOD WAY TO DESCRIBE THE HOUSING MARKET
People sometimes ask what 2025 feels like, but it’s sort of its own thing. It’s not 2021. It’s not 2007. And it’s softer than the normal trend in a year like 2019. I think this is a really good way to describe the market right now.
And now some recap stats for anyone interested.
YEAR-OVER-YEAR:
Take price stats with a grain of salt sometimes since they can bounce around a bit right now. But be sure to look at the average home size (last row in each visual). Sometimes stats might be up, but could that be due to larger and more expensive homes selling?
MONTH TO MONTH:
Thanks for being here. I hope this was helpful.
LEAVING COMMENTS: The captcha is not working perfectly. If you open up a new browser, that should solve the issue. It’s been a problem to comment when clicking from my weekly email. My apologies.
Questions: What do you think of a fifty-year mortgage? What are you seeing in the housing market right now?
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I agree that 50 year mortgages while maybe being a good fit for a few should not become the norm. Trolls will take honest conversations and twist them, but I appreciate your take and whole heartedly agree with it. Lengthening mortgages will only continue to redistribute wealth in the long run. True home ownership will become a thing of the past with only banks and corporations benefitting.
Appreciate your take. Thanks B. And yes, words can be twisted. I find it’s tough today though to have conversations like this because it feels so sensitive. My observation is friends on both sides of the political aisle are critiquing this, so it doesn’t feel as polarizing in that regard. There is some support here, and some of that is really coming from the real estate professional side of things.
Thanks for bringing up the 50-year mortgage idea. It’s not political, it’s math. It was used as an example in a stats class I took to show how little the monthly payment changed when the term extends. I think a lot of mortgage brokers are going to get calls to run the numbers, but not much will happen once folks realize how bad the math is with a 50-year mortgage.
Prices have been falling into the “stable to declining” bucket for me lately in many cases, which is supported by your analysis above. Thanks!
Thanks Joe. Yeah, I tend to take that view also. This option could work for some, but I don’t think it’s a good move for the masses. One big concern is buyers with very little down taking advantage of this to save a few hundred dollars. Good policy has to think through this stuff. If it’s just savvy investors using this product, that’s one thing. But if it’s first-time buyers, let’s at least hit the pause button.
My initial reaction was, really? But considering how high prices are in California and how many first-time buyers are priced out of the market, this approach might actually work for them—at least in the short term. It’s important to remember that they’re living in the payment, not the price. Once their income grows and they’ve built some equity, they could always refinance.
Thank you. I can see that. The real benefit here is some relief for buyers. There is no mistaking that. I guess my critique is that this helps buyers be stuck on higher prices though too. This is where I’d love to see government focus on unlocking supply. This could soften prices, which I think would be great for affordability in the long-run. But to your point, I get it. We want buyers to have access to the market. I just feel there are more concerns here than benefits. Thanks Mary Lou. I appreciate you.
I don’t see the 50 year making much difference. It saves such a small amount of payment compared to a 30 year and that’s if the interest rate stays the same. Doesn’t the interest rate go up with the term? I know years ago I went with a 15 year loan over a 30 year and the payment wasn’t that much different because the rate was lower on the 15 year and the curve in the amortization really ramps up in that last 15 years.
And this is where the devil is in the details. We need some real scenarios once this idea is unpacked more (if it actually is, of course). Right now, the savings really do look very minor. Part of me gets concerned with products where refinancing out of them becomes the goal. Bro, just date the rate, and eventually rates will drop… That could happen. But it doesn’t always work out either. I’m conservative in this way.
A 50 year mortgage would come with a (slightly) higher interest rate than the 30yr, just as a 15yr mortgage has a lower interest rate. The lowest payment would come with an ARM (7/1 is common) or new house with buydown (e.g., 3/2/1), so I would expect people to go with the lowest payment. Most people sell or refinance in 7-10 years anyway.
The 50-year mortgage does really nothing to help affordability. Extending payments 20 more years means people will never pay-off their mortgage. The Fed created the affordability issue over the past 3 years by selling off their $3 Trillion in bonds & mortgage securities and also raising rates 11 times over their faulty rent data. Maybe we should ask them how to fix this problem.
Thanks, Lee. Policy is so important, and it’s policy that drives the housing market more than anything. This feels like the wrong time to introduce something like this. I get the sentiment to provide some minor relief to buyers, but it’s coming after a time of explosive price growth and a time when the market is really softening. It seems like this could prop prices up further (if it’s actually used by the masses).
I’m curious to know how many buyers/homeowners will actually ride a 30 year mortgage all the way to the finish line anyway. Most folks will refi several times over the life of a 30 year loan or sell and move into something else. Wouldn’t the same be said for a 50 year mortgage? Same strategy different timeline. Seems like a different way to make sure “the house always wins”.
Yeah, I suspect very few will ride it that long. There is a viable point there for sure. Yet, the average owner in recent time has stayed in the home for 11 or 12 years. I’m guessing the average is going to go up once new stats come out since we have so many people not moving. After ten to twelve years of time in a 50-year loan, we would see very little equity. This is the part that feels more like a gamble for the owner – especially a first-time buyer. If the market appreciates, it’s likely not an issue. If it doesn’t, this is where this product doesn’t feel like a good thing because it feels like an interest-only loan for the first decade.
Not sure about 50 year mortgage as others have stated. So, if you want a change to supply side, how about the folks in Sacramento and DC make it mandatory that those who own over 5 units of SFR, condo, townhouse must divest themselves or face some rather high taxes. If that occurred, then your supply side issue would have an interesting jolt of about 250,000 to 300,000 units add to the supply side here in CA. Think it might affect the pricing, affordability and availability? InfoSparks shows about 60,000 active listings in SoCal, central Ca and parts up by bay area, hmmm what if we had only a piece of the 250,000 say an extra 100,000 units think that would impact things just a bit?
Thanks, Brad. That would be a massive game-changer. I would like to hear more ideas about how to unlock supply. One other demand-related idea we’re hearing from Bill Pulte is making mortgages portable. Part of me doesn’t know if there is any real consideration here, or if it’s just workshopping ideas publicly by putting stuff out there. The danger in my mind is focusing too heavily on boosting demand in a market where supply is subdued.
Just gut reaction, a 50 year loan is probably superfluous given the variety of loan programs out there. For example, there are 40 yr loans that come with interest only payments for a defined period. Couple that with a tendency for loans to pay off (refinances, sales, etc) in about 5-7 years, why bother signing up for a 50 year loan?
Thanks, Huck. Yeah, I hear you. A loan officer I know was talking about simply buying down the rate with a 30-year today. It seems like there are so many better options.
Great article! I always appreciate your level-headed thoughts.
The tough thing with 50 year mortgages too that are unknown, but likely:
– Higher interest rates on the 50 yr
– MI will be more expensive and on the loan for longer because it’s so much harder to reach enough equity
– MIP on FHA does < 10% will have MIP for an additional 20 years! (assuming FHA follows suit on a 50 yr term and doesn't adjust MIP rules)
Good thoughts. Thanks, Kyle. Yeah, the model we’re talking about assumes the rate would be the same, but that might not be the case. The devil is in the details here, and those numbers will matter greatly. To your point about MI, I cringe about FHA permanent mortgage insurance. Not a fan of that, but I understand there is more risk with FHA too.
I completely agree Ryan! The 50yr mortgage is a TERRIBLE IDEA and ruins affordability even more!!
…and I’m a big Trump fan BTW 🙂
Thanks, Scott. And I appreciate your critique here. I think sometimes people sort of fall along party narratives, but let’s talk about ideas. My observation is there seems to be more backlash than support for the 50 year mortgage on both sides of the political aisle, but there isn’t really any way to objectively gauge that. What else can be done instead of this? I think that’s what we want to discuss.
50 years? I suggest 100 years, as it kicks the can forward many successive generations, as we are now doing with our $38T (and growing) deficit.
It’s the financialization of America — which started with the Nixon gold shock, thru Carter’s slashing cap gains, Reagan going all-in on supply-side policy, Clinton deregulating financial vehicles, and Trump-Biden accelerating national debt to (effectively) pay for billionaire bailouts. Also known as socialism for the rich, and brutal capitalism for everyone else.
This is just another symptom of a far deeper cancer, which is ultra-wealth power and control over the everyday life of regular people. In the olden days it was called “serfdom”. Really, it’s just abject greed.
I’ll take your 100, and raise it to 150. 🙂 Thanks Josh. I think creating more affordability has to be a multi-faceted approach involving many different ideas and policies. The wealthy seem to always come out on top. No mistaking.
Agree with Josh -Serfdom was the term that came to my mind too. Yes, Ryan the wealthy seem to always come out on top.
I think 50 year mortgages would have benefits and drawbacks. More people could afford, but that may drive up prices which would counter the initial benefit. Also, 50 year payments would probably be lower than renting for 50 years, so some buyers may benefit. There could be lower equity throughout the years if only minimum payments were made, but in the end it’s up to the buyer how much they save or don’t. Maybe policy could create something like a 35 or 40 year mortgage first to study the results and then make other proposals.
Thanks, Mitch. I agree there are benefits and drawbacks. Any honest look at the product needs to entertain both. The last thing we need is to drive prices higher. The market has been softening, and it’s okay to let it soften.
The 50 year mortgage argument is better off being shifted into the Avocado Toast / Latte argument if it’s a debate over $150-$250 a month. It’s easier to save that money elsewhere than to lock in to a 50 year that has far worse downsides. Great write up.
Fantastic comment, Nick. If the savings are minimal, why are we even promoting a product like this? Or what about doing a rate buydown? Seems like there are options that would outweigh a 50-year loan that are already available.
My fear is that the 50 year mortgage will simply be a way for sellers to increase the price while the buyer gets less equity. It seems like a band aid to a bigger problem and that is affordability. It certainly makes it easier to pay but it does nothing to make housing more affordable and in fact it makes housing more expensive. The borrower ends up with less equity and pays substantially more over the life of the loan. Looks like a formula to incentivize walking away from the loan when times get tough because the borrower doesn’t have enough skin in the game. Sonds familiar, oh yeah, I remember 2006 -2010.
100%. This is my thought also. The 50-year mortgage is really a seller benefit that is masquerading as a buyer benefit.
Hi Ryan,
It’s been awhile since I’ve commented on here but I had to chime in on this one.
I disagree with you on the 50year mortgage. Here’s why. When you really think about it, there are only 3 ways to increase access to housing for the working class.
1) lower interest rates
2) Make lease term longer
3) Have employers increase incomes of their workers
I don’t believe building more inventory would solve the problem satisfactorily. We will at some point see a huge generational shift as older generations die out and their assets gets passed to younger ones. Being that both the boomers and Millenials are two of the largest generations in history, this will affect the market as a whole. At some point in the future more inventory will start to come on the market as this transition happens.
Option #3 (raising wages) is also not really a feasible thing because those wage increases would only be passed on to the consumer, so it wouldn’t help them much.
Adjusting loan terms and making borrowing easier has always been the best solution to keep inflation and consumer spending at healthy levels.
Thanks, Brandon. I appreciate your critique, and I’m grateful for your respectful tone too. Conversations like this can sometimes really devolve these days, so I’m thankful for this one.
We have a big supply issue right now. Granted, we will eventually get way more homes from The Silver Tsunami so to speak, but we are in a unique position at the moment where I think legislators are going to have to consider if there are ways to unlock housing supply (instead of just focusing on the demand side, which is almost always the mechanism). Could there be tax benefits if selling a home? Could there be tax benefits if an investor who has held a home for X years sells to a first-time buyer also? Could we see no more moratoriums or delays in releasing distressed supply on the market? Just spitballing some ideas here to address the unique situation we’re in.
In Sacramento, we aren’t even back to 2019 levels yet for supply. This is insanity to think that after three years of rampant affordability issues that supply has not built very much. Thus, we have an issue where the market has not been able to correct due to sellers not selling their homes. It’s become a real problem that has kept prices higher than they should be. This is why I think legislators need to at least consider the supply side instead of infusing more demand as the knee-jerk reaction whenever we think of housing.
I’m with you in that I don’t think we can build our way out of this problem. That’s just not going to occur. But if there were ways to decrease the cost of building, that would help.
Whatever the case, it’s been a slow burn of a market, and I don’t see a quick solution on the horizon. I’m concerned about policy that could tighten the trend though instead of soften it. Let’s remember that softening does help buyers afford if prices are lower.
Several times in the past, I’ve heard you say something along the lines of “most sellers are staying put right now because they can’t afford to buy either”. I totally agree. That’s really what stopped my family from selling.
This is why I don’t think flooding the market with new supply is going to help. Although I like your tax incentive ideas, I think that we need to be realistic and say that it’s not necessarily just inventory that’s the problem but it’s also the fact that financing has become too difficult for the common working class individual. Until that problem is solved (with either lower interest rates or longer loan terms), I don’t see it changing. (For working class Americans, “monthly payment” is the only thing that really matters on paper).
I’m curious to know how much banks right now have lowered their borrowing standards. I know that we’re probably never going to see irresponsible lending practices like we did during the 2003-2007 housing market but I know that lending standards were a bit too strict for awhile. Curious as to your take on that.
P.S. I also wanted to add another reason why I think a 50 year mortgage is not a bad idea. It’s in the governments’ best interest to keep the economy inflationary. That’s why the Fed always has their yearly target rate. As long as people don’t get stuck in ARMs like they did in the past, a fixed mortgage actually works in a person’s favor since as time progresses, the standard rate of wage inflation would in theory far outpace the interest one would pay over time. I don’t see long term mortgages as a bad idea in an inflationary economy.
I don’t think just one thing is going to work. We need more than one idea when it comes to housing affordability. I can’t remember where I mentioned this in the thread now, but we’ve been hearing Bill Pulte float the idea of portable mortgages. That would be a total game-changer for the housing market because it would open up sellers being able to move. Is that anywhere realistic though? Or is this just an idea to put out there? Moreover, is this idea now being floated as a positive to cover up the backlash against the 50-year mortgage? Who knows.
I get the sentiment in your last paragraph. But I’d say the 30-year mortgage with a buydown likely competes well with the mortgage payment at a 50-year. The last thing I want to see is first-time buyers embrace a much longer loan (with so little equity gained in 10-12 years). In short, you can be a hedge against inflation with existing products already. I don’t think we need a new product.
Thanks for your take Ryan. I never heard about the “portable mortgage” thing. I guess we learn something new everyday. Very interesting concept.
Since I don’t know what the math would like like, I asked Chatgpt to calculate the payment for a 30 year with an aggressive buydown and compare it to the hypothetical payment of a 50 year. Then I asked it to compare that to current data and see how much that would influence the market.
Here’s what it gave me:
—
Payment Comparison (Example: $400,000)
30-year @ 6.5%: ~$2,528/mo
50-year @ 6.5% (hypothetical): ~$2,218/mo
Difference: 50-year amortization reduces payment by ~$310/mo
Temporary Buydown (Effective but Short-Term)
A 3-2-1 buydown can produce payments similar to—or lower than—a 50-year mortgage in the first year:
Year 1: ~3.5% ? ~$1,796/mo
Cost: ~$18,000 total (commonly seller/builder funded)
This mimics the “low payment” effect but only for the first 1–3 years, after which payments return to the standard 30-year rate.
Permanent Buydown (Costly and Less Effective)
To match a 50-year-level payment long-term, the 30-year rate would need to be bought down by ~1.5–2.0%, which typically costs:
~$20,000–$32,000+ in discount points
Even then, payments generally still won’t reach true 50-year amortization levels.
Based on current DTI distributions and denial data, a 50-year amortization would likely help only about 10–20% of today’s denied borrowers qualify. The reason: extending the term lowers P&I by roughly 10–15%, which typically closes only a 1–3 point DTI gap—and most denied borrowers today are farther off than that due to high rates, elevated home prices, taxes, insurance, and other consumer debt.
If introduced, a 50-year product would create a modest increase in qualified buyers, roughly 3–6% more participants in the active pool.
—
so 3%-6% more applicants in the buyer pool. Yeah, I guess we’d really need more to make a major dent. Thanks for your input.
Thanks Brandon. And sorry for the delay. I was out of state visiting family. I think the one struggle here is many people don’t have the extra funds. This could likely be used as a tool for buyers bringing less money to the table. Moreover, why not just do a rate buydown then when purchasing? The troubling part to me is a lack of equity for the first decade compared to a 30-year fixed. And yeah, this wouldn’t make a massive difference because the math is still out of reach. I think the concerns outweigh any positives (for the masses – not some niche buyers that can be savvy with this).
Buying a house when you’re 30 years old, only to have it paid off when you’re 80 doesn’t seem reasonable to me. (And yes, it is old-school thinking).
I agree with what you said, Two words “unlocking inventory “.
As appraisers we know that unlocking inventory is the game changer. It’s going to happen sooner or later.
Thanks, Dana. We desperately need more supply. I have a visual that shows supply over the past 25 years locally, and it illustrates perfectly why prices haven’t crashed. We can’t expect 2007 results with 2025 stats. This isn’t to sugarcoat the trend in any way, but to simply say it’s been a different dynamic today that hasn’t allowed for quick or major price change. We are down about 7% form mid-2022 locally, and that’s truly stunning to have that little price change in more than three years with these affordability conditions.
I have an idea on making homes more affordable. Increase the housing supply, reduce roadblocks to building homes and the cost of building supplies as opposed to increased tariffs & duties on canadian lumber and other materials. Novel concept I’m sure.
Thanks, Dave.
i rely on math so;
$400,000 loan amount
30-6.25%-$2462/mo-886,663 total (121% more)
40-6.25%-$2270/mo-1,090,060 total-204,000 MORE (172% more)
50-6.25%-2180/mo-1,307,934 total-217,874 MORE over a 40 and $421,000 MORE over a 30….. (226% more)
so you want to die with debt then thats great BUT…. for that same $400,000 house youre only saving 192/mo 40 vs 30 and 282/mo 50 vs 30 which in the grand scheme is it really worth it?
lets just say you buy that house when youre 20.. and you pay on it till youre 70….
or you buy it when youre 20, pay 3429/mo for 15 years and have zero debt when youre 35. (and only repaid $617,344 which is 54% more than the loan instead of more than 120%) (but i cant pay that much more a month….-car loan, cloths loan, student loan, coffee habit, eating out habit….)
rates need to hover around 5.3% APR to make a 30 year note have 100% interest paid.
a 50 year note is taking personal lack of responsibility and predatory lending to a whole new level!
Thanks, Mark. I appreciate the time it took to crank out the math here.
Affordability goes beyond the selling price of a property and the loan terms. Ever increasing property insurance costs could easily wipe out any monthly savings from a rate buy down or, an extended loan term to 50 years. Additionally, energy hungry homes can have a significant impact on overall affordability as well.
Increasing the supply of neglected overpriced homes where an owner doesn’t “need to sell” probably won’t resolve the issue of affordability either.
Thanks Ryan for the wonderful insights.
So true. I think when we look at an affordability index through the years, we have to consider insurance and healthcare costs today too. Not cheap.
In my opinion it’s a good thing. Why the push back?
In my opinion, this helps all sides, a buyer wanting to get in the market now gives them the ability to gain wealth even if it is a mid to long term process, plus it gives them them a tax write-off which we all know renting does not. Also, as they increase their income they can alway refi to a 30 year or less mortgage.
You mentioned that it won’t increase in equity as fast, well we can say the same if they buy a condo, townhome, PUD or a manufactured home, yet I see them sold almost every day. Are we taking advantage of the buyer or are we helping them enter the market when they buy one of those?
I believe most who take advantage of the 50 year mortgage won’t hold onto the home that long, they will most likely sell it once they have enough equity or down payment to buy their next home with a 30 year mortgage or less.
If your worried about all the interest someone is paying on a mortgage you may want stop selling real estate right now because every time you close on a home with a 30 year mortgage at 6% they are paying a ton of interest. A $550,000 home 30 amortized over 30 years will cost them $1,187,000 or $637,000 in interest payments.
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Finally for a seller this now allows them to hold onto most if not all their equity they have built up and allow them to move to their next chapter in life.
Thanks, Lyman. I appreciate your take. I think the difference in my mind with buying a condo compared to a loan that is basically interest-only for the first decade is that the condo might not grow as fast due to the market, but the 50-year product is because of the product. That’s a notable difference.
Look, there are situations where this can work, but savings seem negligible, and I’m concerned about people being put into products with the idea of, “Just refi later, bro.” If that works, fantastic. The model really hinges on an appreciating market though, which is also a factor here since we’ve been in a softening market. It doesn’t always work out, so the cautious part of me wants to hit the pause button and critique this before embracing it just because it will increase volume. If the savings aren’t that great and there are some concerns about a lack of equity building, why not just do a 30-year with a buydown? It’s true that the interest is crazy high on a 30-year, so do we really want to introduce a product with even more interest? I realize people don’t stay in loans forever, but I’m not totally convinced this is an argument for pushing a loan forward that has more interest.
Good morning. I like the 50 year mortgage less than the 30 year mortgage. Any debt makes you someone’s bitch. More interest is not helpful.
Jay, that slogan would just work so well on a meme. Thanks for chiming in.
Depending on how you look at debt, a mortgage can feel like either “good debt” or “bad debt.” If you’ve read Rich Dad Poor Dad, you know that any debt you personally pay for—like your own home—falls into the “bad debt” category. That’s why it’s important to really understand what we’re selling when we talk about buying a home with a loan, regardless of interest rate or loan term.
I may be off slightly on the math but based on a 30-year vs. 50-year amortization chart—and assuming the average homeowner stays in a home for about 8 years—the numbers were interesting. On a $550,000 purchase with 3.5% down at a 6.2% interest rate, the total interest paid over that eight-year period is roughly $252,000 on a 30-year mortgage and $263,000 on a 50-year mortgage. That’s only about an $11,000 difference.
My point is this: people can keep renting and get nothing back in return. They have zero control over their future housing situation, don’t know when the rent might spike, and can be asked to move at any time if the owner decides to sell. Buying, on the other hand, gives stability, pride of ownership, and—most importantly—is the gateway to building long-term wealth.
I recently asked a young couple in their twenties a few simple questions:
“Do you want to own a home someday?” — Yes.
“Do you have the down payment right now?” — possibly.
Then we looked at payments. A traditional 30-year mortgage would be around $3,300 per month. They said they could maybe make that work, but it would be tight. When I showed them a structure that brought the payment closer to $2,900 a month, their answer changed immediately:
“Yes—that feels doable.”
Thanks, Lyman. I appreciate it. I think the calculation I’m concerned about is the amount of principal paid down, and there is a big difference in the first decade between a 30-year and 50-year for sure. In an appreciating market, I’m less concerned about a 50-year loan, but this feels iffy in a softening market. Even ResiClub concurred with that sentiment, saying, “If home price growth remains modest for the rest of the decade while national affordability slowly improves, the 50-year mortgage becomes less appealing, according to ResiClub’s analysis. In a higher home price growth environment—like the 2012 to 2022 period—a 50-year loan becomes more compelling for borrowers whose choice is either buying with a 50-year mortgage (because they can’t afford a 15- or 30-year option) or continuing to rent and build no equity at all.”
So far, it seems like the public has had a pretty negative reaction to this, which makes me doubtful this is going to even happen. Now we are hearing talk about portable mortgages, so maybe that’s the new topic…
Yes, of course—less principal is paid down on a 50-year loan compared to a 30-year loan. But by that same logic, a 30-year loan pays off less principal than a 15-year loan. Should we push every buyer into a 15-year mortgage just because it pays down faster? That doesn’t make sense.
If we start labeling loans as “good” or “bad” based on whether we’re in a strong market or a weak market, then we’d have to reexamine every loan product out there. There are so many “what ifs” that you could debate this in circles forever.
As an optimist with a realist streak, I’d rather focus on what good can come from it—helping someone get into a home they love, locking in stability, and giving them a real shot at building long-term wealth makes sense to me.
I do think we have to consider the market though when making real estate decisions. If we were at the very bottom of a downward cycle, our advice might look different than if the market was softening. So, if today someone was buying and wanting 10% equity in two years, that might sound pretty iffy for so many markets across the country as we are starting to report dipping prices. So, the market can affect decisions. I realize that’s different than the loan product, but sometimes we look at the loan product and market together, and we can make decisions about what to do. People do this with removing PMI, doing a reverse mortgage, selling an investment, etc… And on the loan end, a savvy buyer might consider what the market is doing and what product might best fit for the perceived future. Of course, nobody can promise the future no matter what the year. So, if prices dip ahead, is it ideal for me to be an in interest-only loan? That’s a viable question.
On a related note, I think some buyers chose to get in a few years ago, and now they’re wondering when rates are going to drop so they can refinance. You know, dating the rate…
To play devil’s advocate? Why not just do a 75-year loan? Or a 100-year loan? The 30-year is the standard, so I think we have to let that be the baseline for conversation. Just rhetorical questions.
I do like the good that can come out of this too. I would love to see more volume in the marketplace. I also have concerns about products that really aren’t ideal for the masses and where we’re at in the current market cycle in my opinion. This idea has had tremendous pushback from both the left and right, and I think some of that has to do with the points I’m making. Is there a place for this though with specific savvy buyers? Of course.
I completely respect your perspective, and I hear where you’re coming from. That said, I’m standing firm in my belief that helping someone purchase a home — and begin building their own stability — is far better than leaving them at the mercy of a landlord with no control over their future.
And on a side note… I’ve always disliked the phrase “date the rate, marry the house.” It’s honestly disrespectful to the consumer. You don’t get to “date” a rate — you’re locked into it. It’s more like a marriage than a casual relationship, because if you can’t make the payments, your only options are to sell or face foreclosure. When professionals use that line in their presentations, in my opinion, it’s self-serving and not in the client’s best interest.
Real estate, especially a primary residence, has always been — and will always be — a long-term investment. If someone expects to make quick money in the first 2–5 years, they may be buying for the wrong reasons. My focus is on guiding clients toward clarity, stability, and long-term wealth, not quick wins. This is my belief and my opinion.