Housing affordability has been at crisis levels for some time now, both for renters and would-be home buyers.
Home ownership has long been considered a key part of the American dream, but for so many it now seems out of reach. Prices have soared and interest rates — while low by historical standards — remain much higher than they were several years ago.
Those two factors have pushed monthly mortgage payments ever higher. The share of first-time buyers in the housing market hit a low in 2025 while the age of home buyers hit a new high.
In November, the Trump administration floated the idea of 50-year mortgages. That created what I see as a teachable moment, because many who have never purchased a home have only a fuzzy idea of how mortgages work and tend to focus on the payment.
Of course, how much one can afford to borrow is crucial. That’s why most buyers secure a 30-year mortgage instead of a 15-year loan, to keep their payments lower even though that means paying more interest over time and owning less of the house in the early years.
But a 50-year mortgage takes that idea to the extreme. The savings are meager. And the risk is high.
Let’s let the numbers tell the story. Assume that $400,000 is borrowed, and we’ll look at what the loan payments would be and how much would still be owed after five years with different loan terms.
A 15-year mortgage at 5.44 percent interest: $3,256 monthly, $300,807 owed after five years of payments.
A 30-year mortgage at 6.19 percent interest: $2,447 monthly, $373,081 owed after five years.
A 50-year mortgage at 6.8 percent interest: $2,346 monthly, $394,260 owed after five years.
There’s a huge difference between a 15-year and a 30-year mortgage in monthly payments and in building up home equity. But a 50-year mortgage, if such a loan were offered, would have only slightly lower payments than a 30-year, and nearly all the early payments would go toward interest.
Here’s where assumptions and serious risks come to play. If home prices were to only go up, then it wouldn’t be so risky to grab the lowest payment possible and potentially refinance or sell later. But that’s not how things work.
Most people don’t live in a home until the mortgage is paid off. In order sell a house encumbered by a mortgage, the owner needs that house to be worth more than the loan balance.
Home equity — what the property is worth minus what’s owed — is the key to avoiding a bad situation, one that played out across the nation during the Great Recession.
Recall how countless home buyers took out adjustable-rate loans to get manageable monthly payments right before the real estate market tanked in 2007-09. Suddenly their homes became worth less than they owed on the mortgage, so they’d have to pay the difference if they sold. And with no equity, they couldn’t refinance their loans.
A 50-year mortgage would carry similar risk, for a longer period of time. Even after five years of payments on a $400,000 loan a borrower would only own about $5,000 of the house, plus whatever they put in as a down-payment and any appreciation in value.
A drop in real estate prices could easily leave them underwater, unable to refinance or sell unless they put in a lot more cash. The sales commission on selling the house would be more than the home equity the “owner” built up through years of payments.
And the trade-off for taking on such risk would be saving about $100 a month. Bad deal.
With the 50-year, $400,000 loan I used as an example, if the borrower starting making payments next month it would take until the end of 2042 to pay off just 10 percent of the mortgage.
A 50-year mortgage would increase risk with little benefit
