Would a 50-year mortgage in the US actually work?

The prospect of a 50-year mortgage in the United States—recently floated by President Donald Trump and his Federal Housing Finance Agency (FHFA) director Bill Pulte—has ignited a wave of industry debate, with lenders and analysts weighing in on whether such a product could truly address the nation’s housing affordability crisis.

Trump’s team described the idea as a “complete game changer” for the mortgage market, with Pulte confirming on X that the administration was actively exploring longer-term products.

“We are laser focused on ensuring the American Dream for YOUNG PEOPLE and that can only happen on the economic level of homebuying,” Pulte said.

“A 50 Year Mortgage is simply a potential weapon in a WIDE arsenal of solutions that we are developing right now. STAY TUNED!” he added, noting that other options, including shorter-term and assumable mortgages, were also under consideration.

Proponents argue that a 50-year mortgage could help more people qualify for home loans, especially first-time buyers squeezed by high prices and rates. It could allow borrowers to purchase more expensive homes or simply make homeownership possible for those who would otherwise be priced out. This could expand the pool of potential buyers and stimulate demand.

Mixed industry reactions

Industry response was swift and divided. Georgia congresswoman Marjorie Taylor Greene, a Trump ally, voiced strong opposition.

“It will ultimately reward the banks, mortgage lenders, and home builders while people pay far more interest over time and die before they ever pay off their home. In debt forever, in debt for life!” Greene said, arguing that the focus should instead be on curbing corporate purchases of single-family homes.

On LinkedIn, mortgage expert Joe Defosset acknowledged the potential for lower monthly payments but questioned the impact on wealth creation.

“What if the lower payment on the 50-year loan gets them into the home and then you plan a monthly payment with them that fits their true budget?” Defosset said.

“Maybe they can pay it based on a 30-year amortization or even shorter? I still don’t LOVE it, but it is interesting to open the discussion.”

Real estate investor Graham Stephan cautioned, “A 50-year mortgage would allow you to buy approximately 10 percent more house (or save about 10 percent) at the expense of nearly DOUBLING your payment schedule. There's no way that ends well.”

Rebecca Richardson, a Charlotte-based mortgage broker, crunched the numbers: “If you borrowed $425,000 at 6.5% over 30 years, you’d pay $542,064 in interest. Over 50 years, you’d pay $1,012,478. That’s an extra $470,414 just to lower your monthly payment by $290. You’re not saving money… you’re just dragging out the debt,” Richardson said.

Critics warn that slower equity accumulation could leave homeowners vulnerable if home prices fall, increasing the risk of negative equity and default. The experience of the 2008 financial crisis showed that borrowers with little equity are far more likely to walk away from their homes in downturns.

Others saw merit. John Pompliano, a realtor, argued, “The 30-year mortgage is one of the best financial products available to Americans. 50 years is even better.” Opendoor CEO Kaz Nejatian called it “probably the most pro-homeowner government policy of the last two decades.”

Lenders weigh risks and opportunities

Lenders would face greater risk due to the longer duration and increased uncertainty about borrower repayment over five decades. They might compensate by charging higher interest rates or fees.

For investors in mortgage-backed securities, a 50-year product introduces more interest rate and prepayment risk, potentially leading to wider spreads and increased market volatility.

Ellington Financial, a major player in non-Agency lending, called the proposal “an attractive way to position for mortgage market growth if Trump’s 50-year mortgage unleashes new loan demand.”

The firm noted, “We consider it the highest quality overall exposure to non-Agency lending and servicing... The viability of a 50-year Agency product will rely on adoption and liquidity in both the primary and secondary markets, starting with the higher level of guarantee fees charged to lenders/borrowers to compensate the GSEs for the longer duration,” Ellington said.

The firm also flagged potential market risks: “Demand will also need to coalesce in the MBS market to capitalize the interest rate and prepayment risk, which could initially have the perverse effect of widening spreads as investors create liquidity.”

Some analysts believe that easier financing could push home prices even higher, as more buyers compete for limited inventory. However, most agree that the root cause of the affordability crisis is a lack of supply, not just financing terms. Without more homes being built, a 50-year mortgage alone is unlikely to solve the underlying problem.

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