50-Year Mortgage

The White House floated the idea of creating 50-year mortgages to address housing affordability concerns.

Context

The 30-year mortgage became the standard way to purchase a home in America during the New Deal era. Policymakers at the time wanted to create a loan that borrowers could afford and pay off during their working years. The 30-year mortgage has remained the default option for homebuyers since then, with government-sponsored enterprises Fannie Mae and Freddie Mac buying and insuring the vast majority of these mortgages. 

In recent years, though, concerns have grown that the price of real estate and high interest rates have made home purchases unattainable for many young Americans with 30-year mortgages: Home prices are up 56% since January 2020, and the median age of first-time homebuyers reached 40 in 2025, up from the late 20s in the 1980s.

The Proposal

This weekend, Federal Housing Finance Agency (FHFA) Director Bill Pulte proposed a 50-year mortgage on social media, calling it "a complete game changer" for homebuyers. President Trump commented, "All it means is you pay less per month. You pay it over a longer period of time. It's not like a big factor. It might help a little bit."

Pulte called the proposal a "potential weapon" among other solutions the administration was considering to combat high housing prices. The FHFA oversees Fannie Mae and Freddie Mac, which play a central role in the mortgage market.

Financial Impact

Extending a mortgage to 50 years would reduce monthly payments for borrowers by a few hundred dollars compared to a standard 30-year loan. However, borrowers would pay more in total interest over the life of the loan, with analysts estimating the additional interest cost in the hundreds of thousands of dollars.

Borrowers would also build equity in their homes much more slowly with a 50-year mortgage, taking longer to reach the same level of ownership. Lenders would likely charge higher interest rates on 50-year loans due to the increased risk of the longer duration, adding to the total cost.

Criticisms

The proposal drew pushback from economists, policymakers, and some Trump supporters, with critics arguing that a 50-year mortgage would not address core problems like a lack of supply and high construction costs.

With the median age for first-time homebuyers now 40 years old, many borrowers would be 90 by the time the loan was paid off, well beyond the average American life expectancy. Some economists warned that the proposal could increase home prices by bringing more buyers into a supply-constrained market.