Trump offers 50-year mortgages, but do you want one?

What Trump said – and why it’s controversial

President Donald Trump recently suggested that homebuyers should have a 50-year mortgage option to make home purchases more affordable, saying in a post on his social media platform that extending the standard 30-year mortgage would lower monthly payments and “make the American dream affordable again.”

But critics say the idea misdiagnoses the problem. The main problem in the housing market is not how long borrowers have to repay, but rather the shortage of homes for sale. They warn that extending loans over half a century may bring minor relief to some buyers, but it could also push up home prices and make it harder for homeowners to build lasting wealth.

How a 50-year mortgage will change what you pay and what you own

On paper, a longer mortgage does what it promises: lower your monthly bill. But these smaller payments come at a cost: higher rates, more interest paid, and slower wealth building over time.

No one knows what rate lenders will charge on a 50-year loan, but it will almost certainly be higher than the 30-year interest rate. Just as 30-year loans cost more than 15-year loans, lenders charge additional fees to tie up funds for a longer period. UBS analyst John Lovallo suggested assuming a half-percentage point rise to estimate the difference.

For a home worth $415,000 — the current median price in the U.S., according to the National Association of Realtors — a buyer with a 20% down payment would borrow about $332,000. At 6.50% for a 30-year loan, this borrower would pay $2,098 per month in principal and interest.

Extending the term to 50 years would likely raise the rate to about 7.00%, but the much longer repayment term would still reduce the monthly payment. And in the same house, Investopedia Payment for 50 years calculates to $1,998 per month – only about $100 less. This may help someone on a limited budget, but for many people, this does not represent a significant amount of savings.

The real drawback comes from how slowly home equity builds. Because most of each payment goes toward interest — and that continues for decades — it takes much longer to make progress on the principal.

Here are the calculations using the same home, down payment and mortgage rates: After 10 years, a 30-year borrower will have paid off about $50,000 principal, compared to just $10,000 for a 50-year loan. At age 20, the 30-year borrower would have built about $147,000 in equity, while the 50-year borrower would have built less than $32,000.

In other words, a 50-year borrower would have roughly $40,000 less in equity after 10 years and $115,000 less after 20 years — a significant gap in building long-term wealth for buyers of the same home.

Why Mortgage Professionals Say The Idea Doesn’t Add Up

The real barrier to home affordability is not the length of mortgage terms, but the lack of homes to buy, economists say. Goldman Sachs estimates that the United States is still short of at least 3 million to 4 million homes, a gap that keeps prices high and discourages buyers.

This supply problem is why many analysts see long-term loans as the wrong solution. A 50-year mortgage may make payments seem easier, but the cost of that extra time is steep.

“The disadvantages are that a 50-year mortgage results in roughly double the interest payments of a 30-year mortgage and a longer road to actual homeownership,” said Joel Berner, chief economist at Realtor.com.

Berner also warned that more flexible mortgage terms could backfire. He added: “More flexible financing is essentially a support for housing demand, which will increase the purchasing power of homebuyers – without increasing the supply of homes, which will lead to higher home prices.” “The savings from a 50-year mortgage may be completely negated by rising home prices.”

In short, longer-term mortgages may make payments easier in the short term, but they may raise overall costs and push prices higher. As Berner said: “This is not the best way to solve the housing affordability problem.” He said real progress will come from policies that expand supply and reduce inflation, keeping mortgage rates high.

Right now, a 50-year mortgage is just talk. But if this idea comes to life, the question will not be whether it will make the buying process easier, but rather whether extending the loan over a long period will really make sense, for buyers or the industry.