Would Trump's 50-year mortgage have a much higher rate?

"A key criticism of offering house hunters a longer-term borrowing option is that it would not save borrowers a significant amount of money in the short term and would drive up buyer's financing costs in the long haul. Numerous housing gurus claim the interest rate on these half-century loans would be significantly higher than the traditional 30-year mortgage. This logic is largely based on the fact that 30-year fixed-rate mortgages are more expensive than the already available but lesser-used twist, the 15-year home loan."

"Since 1991, the 30-year mortgage has averaged 5.83%, according to Freddie Mac, compared with 5.25% for the 15-year mortgage. But is extrapolating that gap, which varies based on the state of the economy, to a 50-year loan appropriate for estimating the rate on these half-century mortgages? The bond market, which sets many borrowing rates, is a complex entity. Bond investors must balance the long-term risks, notably inflation, against the opportunity to secure a financially attractive yield for an extended period."

Real estate insiders express skepticism about 50-year mortgages, arguing they would not generate large short-term savings and could raise long-term financing costs. Experts say interest rates on half-century loans would likely exceed those on 30-year mortgages, a view informed by historical spreads such as a 5.83% average for 30-year loans versus 5.25% for 15-year loans since 1991. Extrapolating that gap to 50-year loans is uncertain because the bond market is complex. Bond investors weigh long-term risks like inflation and opportunity costs, and mortgage bond yields are further affected by refinancing risk. A 2021 Federal Reserve Bank of San Francisco study found 50-year government debt might cost only slightly more than 30-year debt.

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