A 50-year mortgage sounds like an easy fix for high monthly payments: stretch the loan, shrink the bill. But when you run the numbers—and think through how housing markets, lenders, and households behave—the idea mostly trades short-term relief for much higher long-term costs, slower wealth-building, and potentially higher home prices. Here’s a clear, math-driven look.
What a 50-year loan really buys you: smaller payment, much bigger total cost
Take a typical $400,000 loan.
At 6.5% interest
- 30-year payment: ~$2,528/month
- 50-year payment: ~$2,255/month
- Monthly “savings”: ~$273 (≈11% lower)
- Total interest (30-yr): ~$510,000
- Total interest (50-yr): ~$953,000 (≈+87% more)
At 7.5% interest
- 30-year payment: ~$2,797/month
- 50-year payment: ~$2,561/month
- Monthly “savings”: ~$236 (≈8% lower)
- Total interest (30-yr): ~$607,000
- Total interest (50-yr): ~$1.14M (≈+87% more)
Bottom line: You shave under $300 off the monthly bill but pay hundreds of thousands more over the life of the loan.
Does it help you “afford more house”? Yes—and that’s part of the problem
If lenders qualify you using the monthly payment, a 50-year term lets you borrow 9–12% more for the same monthly outlay. In our 6.5% example, the payment for a $400k 30-year loan could support $448k on a 50-year.
That boosts “affordability” on paper—but it can also push prices up, especially in supply-constrained markets. If many buyers suddenly qualify for bigger loans, sellers capture that capacity. The monthly relief risks getting capitalized into higher home prices.
Longer terms mean much slower principal paydown. With a 50-year:
- You build equity more slowly, so you’re more exposed if prices dip.
- You pay mortgage insurance longer (if applicable).
- You’re still making sizable payments in what could be retirement years.
If the strategy is “I’ll refinance later,” that’s a rate-timing bet—not a plan.
“But I’ll invest the savings”—does that offset the cost?
The $273/month difference (in the 6.5% example) invested at a steady 5% after tax grows to about $42,000 after 10 years. Helpful—but small compared to the extra ~$443,000 of total interest baked into the 50-year loan.
Even on a present-value basis, a 50-year loan with the same rate generally costs tens of thousands more than a 30-year. You’d need unusually high, consistent investment returns and iron discipline to come out ahead.
System-level frictions: why lenders and markets may balk
Rate/Duration risk: A 50-year fixed loan lives a long time on bank balance sheets or in mortgage-backed securities. That interest-rate risk demands a premium (i.e., a higher rate), which could erase the small monthly advantage.
Prepayment behavior: Few borrowers keep the same mortgage for decades. If average life is still 7–10 years, you’ve just slowed amortization and paid more interest early—without enjoying the “full-term” benefit.
Product design creep: If 50-year loans arrive paired with teaser rates, interest-only periods, or looser standards, you start rhyming with pre-2008 problems.
Who (if anyone) might benefit?
Cash-flow-constrained buyers in very high-cost markets who need a temporary bridge and expect to refinance soon and understand the tradeoffs.
Households with volatile income that value a lower fixed payment as a safety margin—again, ideally with a concrete refinance or prepayment plan.
For most buyers, a 50-year loan is an expensive way to buy a little monthly relief. Often, a 40-year (already used in some modifications) or a 30-year with targeted down-payment aid, rate buydowns, or increased housing supply delivers better outcomes.
Policy takeaway: treat the cause, not the symptom
Housing is expensive because supply is tight and rates are elevated. Extending amortization doesn’t create homes; it mostly rearranges who can stretch farther, with a meaningful risk of inflating prices and burdening borrowers with far more lifetime interest.
Verdict: As a broad solution, 50-year mortgages make poor economic sense. They marginally lower monthly payments while dramatically increasing total costs, slowing equity-building, and likely fuelling higher prices. They might be a niche tool for specific, well-advised borrowers, but they are not a cost-effective fix for housing affordability.
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6 Responses
Interest only loans are appealing. If you are concerned about Interest you can take a seven year loan. You save more than a 30 year loan.
horse feathers! the average person doesn’t stay in the same home for 50 years. the biggest hurdle is buying the first house, when lower payments help a lot. but families outgrow a starter home, and eventually downsize as the children move out. so the amortization period is mostly moot, since the house will be sold long before huge amounts of interest change hands anyway. yes, shorter amortizations and more frequent payments are the smarter strategy, but only if you have the cash flow to do it.
The same case could’ve been made with the 30 year when they had only 5 or 10 yr mortgages
The only difference is because trump thought of it
You can do a similar comparison between 15 and 30 year mortgages and use the same reasoning to disqualify 30 year mortgages. Yet, they are useful and many people have them.
He’s comparing 50 year to 30 year, but the real comparison should be 50 year to renting. Someone who can’t afford a $3,160 monthly payment on a $600K home at 6.5% could afford about $2,760 on a 50 year. That’s the difference between owning and renting, not just paying more interest.
Yes the 50 year adds interest, about $540K vs $1.06M, but if the home appreciates just 3% a year, that $600K house becomes around $1.45M after 30 years and $2.4M after 50. The equity built over time outweighs the added interest cost.
The “invest the difference” part is off too. Using long term S&P 500 averages of around 9 to 10%, that $400 a month saved could grow to about $870K in 50 years, not $200K like the article says.
Most people don’t actually hold a mortgage for 50 years anyway, they refinance or sell long before that. And with inflation, those fixed payments get cheaper in real dollars over time, while rent usually keeps rising and can easily pass what the mortgage would have been.
It’s not a fix for housing, but it gives buyers more flexibility. Saying it just raises demand is like saying we should remove mortgages completely so only the rich can buy.
1948: Congress authorized the 30-year mortgage for new construction.
1954: The authorization was extended to include existing homes.
1960s: The 30-year mortgage became a widely accepted and standard option
same arguments you could have made about the 30 year fixed, compared to 15/20 year mortgages prevailing then