50-year loans with high LTVs could present problems when the homebuyer needs to sell and move
The discussion of a potential 50-year mortgage continues, as the Trump administration said it is one of the things they’re considering to try to help expand homebuying.
Reactions to the proposal have been mixed, with opponents citing limited ability to build equity in the property and the possibility of driving further home price inflation. Those in favor believe that any equity built up in a home is better than renting and could open the door for more homebuyers.
One area of concern about the drawbacks of a 50-year mortgage loan is government loan programs that allow borrowers to approach, and in some cases exceed, 100% loan-to-value (LTV) of the property. One broker notes this could force sellers to bring cash to the table to sell their properties.
Carlos Scarpero (pictured top), mortgage broker at Edge Home Finance, specializes in VA loans. He said that while it is unknown whether 50-year mortgages would be available in other government offerings, he doesn’t think it would make much sense in the VA loan space.
“The cons really outweigh the pros when I look at this, and especially via the VA side,” Scarpero told Mortgage Professional America. “If VA does decide to go down this path, I think it's disastrous. Here's the crazy thing if VA does go down this path. You're sitting there getting a zero-down loan at 102.5% LTV. Five years in, you only paid off the funding fee.
“Then, when you factor in realtor commissions to sell the house, it would take basically 18 years to get that thing to break even. You're basically relying entirely on appreciation and hoping the value goes up enough to sell it for years. That’s nuts to do that. When I ran the math, this is bad news for the average consumer.”
Maxing out payment
Scarpero has another concern about the 50-year mortgage: home price inflation. He said that if borrowers are told they can get a lower payment on a longer mortgage, many of them will want to get the most house they can afford and stretch it over 50 years.
“It's been proven that every time rates go down, when rates are sitting there at 2.5% or 3%, people buy based on payment,” Scarpero said. “So when rates are at 3%, people just keep jacking up the prices. I tell them what they can afford based on that payment, and then they go and jump into that price. So if prices are $200 less a month, what's going to happen? I think it'll start a bidding war. Now they’re stuck with the same payment, but worse terms.
While many in the industry have been critical of the ideas floated by the administration in recent days, including assumable and portable mortgages, Scarpero understands why they’re throwing these ideas out there.
“I understand where Trump's coming from,” he said. “They want to find something. What are we going to do to make houses affordable again? And I get it. Consumers are angry that the houses are too expensive. They want a solution, any solution, and that's just something that they’ve put out there.”
Foreclosure crisis?
One thing that happens with some consumer loans when borrowers get behind and are upside-down is that they’ll just let the collateral be repossessed. This happens in auto lending frequently. Scarpero doesn’t want this to be commonplace in the housing industry.
“These cars go upside down, and what do people do on their cars? They walk away,” he said. “When somebody is sitting there looking at a negative $15,000 or $20,000 in equity, they're going to be like, ‘You know what? I'm just going to walk from this thing. Mortgage company, here, have the keys.’ Then we have a foreclosure crisis on top of us.”
Scarpero believes one reason for these suggested mortgage changes is that they can be implemented faster than addressing some of the longer-term issues affecting home affordability. However, it could have unintended consequences that could do more damage than good.
Trump’s proposal for 50-year mortgages aims to ease monthly payments but raises questions over total interest and long-term affordability. Industry experts caution that longer terms don’t automatically solve housing challenges. https://t.co/afDanJH9IG
— Mortgage Professional America Magazine (@MPAMagazineUS) November 11, 2025
“The other stuff takes a lot more work,” Scarpero said. “It takes a lot more work to go build houses. It takes a lot more time to reform property taxes and homeowners’ insurance. In Trump's mind, it's an easy fix. You basically just write a little law, and you change a 30 to a 50.
“So from a regulatory standpoint, it's actually a lot easier, because you literally just change your number and press submit, and you're good to go. But from a long-term thought of the economy, it's a whole different problem.”
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