A fifty year mortgage will not solve affordability. It only buys time we do not actually have.

"The recent interest in a fifty year mortgage says a lot about where the housing market is today. Buyers feel shut out, lenders are fighting for volume, and policymakers are searching for ways to make the math work. Extending the mortgage term to fifty years sounds like a bold solution, but it is really a familiar idea stretched to an extreme."

"A fifty year mortgage also faces fundamental structural challenges. Anything beyond thirty years is considered non conforming, which means Fannie Mae and Freddie Mac will not purchase it. Without support from the GSEs, lenders cannot easily sell these loans into the secondary market. The risk stays on their books, pricing is higher, and adoption remains limited. The entire ecosystem would have to evolve for this product to become widely viable, and that shift is far from simple."

"Even if it were adopted, the tradeoffs for borrowers are significant. Equity builds slowly. Total interest paid increases substantially. In the early years of the amortization schedule, nearly every dollar goes toward interest rather than principal. If a borrower refinances from a fifty year mortgage into a thirty year at year seven, the remaining principal will be meaningfully higher than if they had taken a thirty year loan from the start. That is the natural consequence of paying over a longer timeline."

A fifty-year mortgage reduces monthly payments by stretching amortization but leaves home prices unchanged, so affordability remains limited. The product shifts cost rather than addressing the fundamental barrier of expensive assets, increasing total interest paid and slowing equity accumulation. Mortgages longer than thirty years are nonconforming, preventing Fannie Mae and Freddie Mac from purchasing them and keeping risk on lender balance sheets, which raises pricing and limits adoption. Widespread viability would require significant changes across the mortgage ecosystem. Some borrowers may find temporary value in the structure despite the notable long-term tradeoffs.

Read at www.housingwire.com