Should you cheer or side eye a 50 year mortgage?
Should You Cheer or Side-Eye a 50-Year Mortgage?
Stretching a mortgage to 50 years can lower your monthly payment a bit, but you’ll build equity glacially and pay a mountain more in interest. If you might sell or “trade up” within ~5 years, tread carefully—your loan balance may not budge much.
What’s this 50-year mortgage idea?
The administration floated a plan to allow 50-year mortgages as a way to make monthly payments smaller. Early reporting confirms it’s being considered by federal housing officials, while experts warn it would slow equity-building and raise total borrowing costs. Think of it like spreading your pizza over two dinner parties: you won’t feel as full tonight—but you’ll be eating crust for a long time.
“Date the rate, marry the house” still applies
Real talk: rates change, houses don’t. You can usually refinance when conditions improve—hence “date the rate, marry the house.” A 50-year loan follows the same logic in theory. But the math of amortization matters: in the early years, most of your payment is interest, not principal, so equity builds slowly. Stretch the term to 50 years and that slow crawl…gets slower.
Quick math (illustrative example)
Let’s say a $400,000 loan at 6.5%:
30-year payment ≈ $2,528/mo
50-year payment ≈ $2,255/mo
Monthly savings ≈ $273
Total interest over life:
– 30-yr ≈ $510,178 vs 50-yr ≈ $952,921 (≈ $443k more)
After 5 years of payments:
30-yr: you’ve paid down ≈ $25,556 of principal
50-yr: you’ve paid down ≈ $6,234 of principal
Translation: the 50-year loan lowers the monthly sting, but your equity builds like a sloth on a Sunday. (Figures are simplified and for illustration only; taxes/insurance not included.)
Those ballpark gaps line up with independent estimates in the news coverage showing modest monthly savings but much higher lifetime interest and slower equity.
Pros (why someone might like it)
Lower monthly payment than a 30-year, which may help with cash flow today.
Could expand eligibility for some buyers who are payment-constrained (with all the caveats below).
Cons (the fine print you can’t ignore)
Equity builds painfully slowly. If prices wobble, negative equity risk rises.
Total interest explodes over time (hundreds of thousands more vs. a 30-year in many scenarios).
Resale/upgrade friction. If you plan to sell in <5 years, you may not have much principal reduction—so you’ll need price appreciation or extra cash for the next down payment (or both).
Rates may price higher than 30-year due to longer risk—shrinking the monthly savings.
“I want to upgrade in 3–5 years”—what could go wrong?
With a 50-year term, your balance barely moves in the early years. If your next purchase needs a bigger down payment, you’ll need to rely on:
Home price gains (not guaranteed), and/or
Consistent saving outside the mortgage.
If market values stall or dip, you could be equity-light right when you want to move. (That’s me waving a bright yellow caution flag.)
Who might consider a 50-year?
Buyers with stable long-term plans (not serial movers), who value lower monthly payments today and are comfortable with slower equity.
Households expecting income growth and planning to prepay principal regularly (turning a 50-year into something shorter over time).
Who should probably skip it?
Anyone eyeing a move in the next 3–7 years.
Buyers who need equity to trade up soon.
Folks who want their mortgage gone by retirement (carrying a 50-year can run that payment into your 70s/80s).
Smarter alternatives to test first
Seller/Builder concessions or rate buydowns (2-1/3-2-1) to reduce payments temporarily while keeping a normal term.
Assumable loans (when available)—take over a seller’s lower rate. Policymakers are also discussing making portability/assumability easier.
Adjustable-Rate Mortgages (ARMs) if your move-timeline is short and you understand the reset risks.
Bigger down payment or paying points if the math pencils out.
Starter-home strategy: buy what’s comfortable on a standard term, then trade up after building equity the old-fashioned way.
I can see both sides. Lower payments help today; the trade-off is slow equity and hefty lifetime interest. The “right” move depends on your timeline and cash-flow vs. wealth-building priorities. As always: do what’s best for your current situation—and make the math, not the headlines, drive the decision.
Sources (for the nerds like me)
Realtor: https://www.realtor.com/news/real-estate-news/trump-50-year-mortgage/
TIME: overview of the 50-year proposal, pros/cons, and expert commentary. TIME
CBS News: payment and total interest comparisons; policy status; alternatives (assumable/portable). CBS News
Investopedia: why early-year payments are mostly interest (amortization basics). Investopedia
