"Though details weren't provided, the three-word version says plenty: 50-year mortgage. A loan that, if you didn't sell or refinance - which to be fair, most homeowners will at some point - would take half a century to repay. The idea popped up in a Truth Social post from the president over the weekend, which was quickly re-posted on X by Federal Housing Finance Agency director Bill Pulte."
"Reducing a loan's monthly cost by taking longer to pay it back is basic math. Divide any loan amount by a larger number of months and you'll get a smaller monthly payment, because the loan's cost is spread over more time. A lower payment keeps more money in the borrower's pocket on a month-to-month basis. But - and this is a big but - over the life of the loan, borrowers pay less on loans with shorter terms."
Mortgage rates moved modestly lower, but attention centered on a proposed 50-year mortgage promoted on social media. A 50-year loan would, absent selling or refinancing, take fifty years to repay. The proposal aims to aid affordability but drew swift, strong criticism. Extending repayment lowers monthly payments because the principal is spread over more months, keeping more cash available monthly. However, longer terms raise total interest paid; borrowers with shorter terms pay less overall. Most U.S. mortgages are 30-year fixed loans for manageable payments, while lenders charge lower interest rates for shorter terms due to reduced lender risk.
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