US President Donald Trump’ 50-year mortgage plan sparks debate among local industry experts
The proposal of 50‑year home loans, floated recently by the Trump administration in the United States, has prompted strong scepticism among Australian economists and housing commentators, with many arguing such products would do little to improve affordability for borrowers.
In the latest Finder RBA Cash Rate Survey, the majority of local experts surveyed said ultra‑long mortgage terms were not an effective way to make housing more accessible. According to Finder, four in five of those who addressed the question did not support 50‑year mortgages as an affordability tool.
One concern raised was that stretching loan terms would likely increase borrowing capacity and, in turn, place further upward pressure on house prices, rather than easing them. Another issue for lenders and brokers is the impact on lifetime interest costs and the longer period over which households would carry housing debt.
“While 50‑year mortgages lower monthly repayments, they won’t make housing cheaper,” said Stella Huangfu (pictured right) of the University of Sydney. “In most cases, it actually allows people to borrow more, which pushes prices even higher. Buyers end up paying far more interest over their lifetime, carrying debt for decades longer, and building equity much more slowly.”
Industry commentators also highlighted the distribution of benefits between borrowers and lenders. Extending terms may ease serviceability on paper, but it also locks customers into longer interest payment streams.
“Increasing the mortgage length benefits the lenders far more than it benefits consumers,” said Dale Gillham of Wealth Within. “Australia has this unique love affair with property, and we need to look deeper into why this is.
“Further, we need to look at what is driving prices to unrealistic levels. In the last 40 or so years, housing affordability has gone from around four times the average wage to over eight times. As it stands, due to government compliance, taxes and fees, building new homes is far from affordable, and in many cases is not viable for investors.
“We need to fix the systemic issues first before we make loans more accessible, as this will only pour more fuel on the fire, with the financial institutions the big winners.”
From a macroeconomic perspective, some analysts argued that 50‑year loans would increase total interest paid without tackling underlying cost drivers in the housing market, such as land supply, tax settings and planning.
“They will just mean people will end up paying even more in interest payments without doing anything to improve affordability,” said Shane Oliver (pictured right), chief economist at AMP.
There are also questions about how very long‑dated mortgages interact with retirement patterns, especially as more Australians work later in life and carry mortgages for longer.
“It's hard to pay off a mortgage if you're retired,” said Nalini Prasad of UNSW Sydney.
Not all commentators were opposed. Some argued that if housing is treated primarily as an asset and a store of wealth, emphasis should be placed on servicing rather than extinguishing the debt, making very long‑term loans a potentially useful instrument in some circumstances.
“Debt needs to be serviced, not paid off,” said Nicholas Gruen of Lateral Economics. “For so long as we treat housing as an asset market, that's how we should see it.”
Others supported exploring 50‑year terms as one of several possible responses to affordability challenges, while acknowledging that such products would not, on their own, resolve structural constraints.
“Affordability is a major issue and it makes sense to explore every potential solution available,” said Leanne Pilkington (pictured right), executive at Laing+Simmons.
For mortgage professionals, the debate underscores the need to weigh product innovation against long‑term borrower outcomes, particularly around total interest costs, equity build‑up and retirement readiness. Any move towards 50‑year home loans in Australia would likely require close scrutiny from regulators, lenders and brokers to ensure they support sustainable, rather than purely larger, borrowing.
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