【Epoch Times November 17, 2025】The soaring housing prices and mortgage interest rates in the United States are making it hard for young people to afford homes, leading to an increase in the average age of first-time homebuyers. These are the harsh realities of the current housing market in America. How can we break free from this situation?
Recently, President Trump called for a 50-year mortgage plan to instantly alleviate the monthly repayment pressure on everyone’s mortgage. Is this truly a solution to the pain points of homebuying currently? What are the risks involved? Who would be suitable for a 50-year mortgage? In this analysis, we will explore the advantages and disadvantages and identify who would be more suitable to apply for it.
On November 8th this year, President Trump directly suggested the idea of a “50-year mortgage” on his social platform, Truth Social.
On the left side of the image was a portrait of President Roosevelt with “30-year mortgage” written on top, while on the right was President Trump with “50-year mortgage” written. This connection was made to link this concept with Roosevelt’s “30-year mortgage” plan, which was part of his famous “New Deal” program in the 1940s, aimed at helping Americans afford housing more easily.
The next day, November 9th, he reiterated this 50-year mortgage idea in an interview on Fox News, sparking a significant amount of discussion in the political and economic circles.
Bill Pulte, the Director of the Federal Housing Finance Agency (FHFA), confirmed that Trump was considering this idea by reposting the image and writing, “Thanks to President Trump, we are indeed exploring a 50-year mortgage – this will completely change the game.”
Why did Trump propose the 50-year mortgage? Simply put, it is to make it easier for Americans to bear the pressure of buying a house by providing more time for homeowners to repay their mortgage. By extending the loan term, monthly payments are reduced, expanding the eligibility and purchasing power of potential buyers, seen as a “quick” demand-side relief tool.
Furthermore, the White House and FHFA position this initiative as a means to improve the accessibility of home buying for young people, making it easier for them to “get on the property ladder.” In the midst of a housing crisis, adjusting loan conditions rather than direct government subsidies could, in theory, increase credit supply and stimulate transactions without allocating significant budgets.
Is Trump’s 50-year mortgage plan really attractive? There’s a catch in the first 10 years! Buyers beware | 50-year mortgage: five kinds of people well-suited, five kinds not suitable. Let’s dissect it in Episode 216 of the US real estate hotspot.
So, can the 50-year mortgage truly enhance people’s affordability and reignite the real estate market? Let’s first analyze the advantages of applying for a 50-year mortgage.
The most significant benefit, of course, is the lower monthly payments, easing cash flow pressure and the “maximum affordable monthly payment.” For example, with a $600,000 loan at a 6.5% annual interest rate, applying for a 30-year mortgage involves approximately $3,792 in monthly payments; while a 50-year mortgage entails approximately $3,382, reducing monthly payments by $410.
In high-priced urban areas, the high monthly payments are a strict limit; a 50-year term lowers the entry threshold, making “getting in first and refinancing later” a more feasible option, especially for first-time homebuyers. If interest rates drop in the future or more favorable products become available, refinancing to adjust the term and rate is possible. The 50-year term can serve as a “transitional relief” during high-interest rate periods.
Additionally, lower monthly payments directly decrease the Debt-to-Income Ratio (DTI), making it easier for buyers on the brink to qualify or borrow a higher amount. The saved monthly payments can be used to buy points for interest rate reduction, increase the down payment, or make critical repairs to enhance long-term property quality.
For investors, lower monthly payments increase the likelihood of achieving a Debt Service Coverage Ratio (DSCR) greater than 1 under the 50-year mortgage, meaning rental income can better cover loan repayments and operational costs, resulting in positive cash flow.
Now let’s discuss the disadvantages or risks of the 50-year mortgage. The first drawback is the “significant increase in total interest,” extending the term means more interest payments; even if the interest rate remains the same, the lifetime interest will be much higher under a 50-year term compared to a 30-year term.
Using the example of a $600,000 mortgage, the initial principal payment for a 30-year term is around $542; for a 40-year term, it is about $263; for a 50-year term, the initial principal payment is only about $132. It’s evident that as the term lengthens, the monthly payment approaches the level of “interest-only” payments, with a minimal amount initially going toward principal repayment. As a result, the dwindling of principal is slow, with most payments going toward interest in the first 5-10 years, delaying equity growth.
After ten years of repayment, the remaining principal balance for a 30-year term mortgage is $508,657, while for a 50-year term mortgage, it stands at $577,720.
Therefore, accessing Home Equity Line of Credit (HELOC) or leveraging through cash-out refinancing may face restrictions. It’s only as time progresses, the interest proportion decreases, the balance slowly declines, and the portion of the monthly payment allotted to principal repayment increases.
Moreover, as the principal decreases slowly, if the market undergoes a period of downward adjustments, it is more likely for the housing prices to fall below the remaining loan balance. Additionally, due to the extended term and the demand for compensation from investors, the actual interest rate or points may not be lower than those of a 30-year term, posing a risk of higher loan costs.
Many experts are also concerned that this policy could result in the unintended effect of “demand-side stimulation.” In a housing market with limited supply, an increase in demand could drive up prices, redistributing the saved monthly payments back to market prices. Consequently, the original objective of lowering affordability may not be achieved.
After reviewing the pros and cons above, it is evident that the 50-year mortgage is more like a “cash flow tool” rather than a “quick asset accumulation tool.” As such, it is better suited for individuals who are sensitive to monthly payment pressures, plan for long-term ownership, and prioritize cash flow over quick repayment and appreciation. Theoretically, it is more suitable for the following five groups:
・First-time buyers and younger populations in their early twenties or thirties. This group could potentially lower the current average age of first-time homebuyers in America.
・In high-priced areas like the Bay Area, New York, Los Angeles, it may have a certain impact.
・Individuals with stable incomes but facing pressures from child care, education expenses, existing student loans, or car loans.
In other words, these groups are more suitable for those who say: “I want to live in this city for a long time, and rarely move.”
・Professionals in rapidly advancing careers like doctors, engineers, lawyers, and individuals in the tech industry.
・Those with decent current salaries but expecting significant raises or promotions in the next 5-10 years, as well as opportunities for Initial Public Offerings (IPOs) or bonuses.
For those planning to purchase rental properties, investment properties, the 50-year mortgage may be very attractive to certain individuals. By lowering the combined monthly principal and interest payments, it boosts the Debt Service Coverage Ratio (DSCR), making it easier for properties to have positive rental cash flow. Especially for long-term investors eyeing multiple units, townhouses, or small apartments, and intending to hold for over 10 years rather than selling within 3-5 years.
・Entrepreneurs who require significant capital investment in their businesses.
・Individuals actively investing in the stock market, private equity, or their specialized fields with a better long-term return rate compared to a mortgage interest rate.
This group may view the 50-year mortgage as: “I’ll use the lowest monthly payment to keep funds working in places with higher returns.” The advantages lie in maximizing cash flow and transforming a mortgage into a “cheap long-term source of funds.”
・Individuals planning to hold onto properties for over 30 years, focusing on leaving a legacy for their children and not insisting on completely paying off the property.
・Those accustomed to long-term ownership, relying solely on rent and property appreciation.
For these families, the 50-year mortgage is more about “ensuring stable cash flow to keep the house running” rather than “paying off entirely.” With less mortgage pressure, they might have additional resilience in case of economic downturns or unemployment.
Conversely, which individuals are “less suitable” for the 50-year mortgage? There are also five kinds:
For instance, borrowing a 50-year mortgage at 50 years old, which would need to be repaid until 100 years old, is unrealistic. Moreover, retirement income typically decreases, intensifying the burden of a long-term debt.
Using a 50-year mortgage solely to “forcefully buy an expensive house” resembles extending the agony rather than lowering risks.
Since the initial payments mainly cover interest, and the dwindling principal slows, property equity growth is slow, and short-term resale profits may be minimal. This is especially true after deducting broker fees, taxes, transfer costs, leaving little capital in your pocket.
If you are psychologically fixated about “paying off by a certain age,” the 50-year mortgage will only heighten your daily anxieties.
If you initially planned to invest or repay principal with the surplus capital but ended up consuming it on lifestyle upgrades or expenses, it could lead to a scenario of “high interest with no assets,” which is the worst-case combination.
In conclusion, the 50-year mortgage is more suitable for individuals whose income can cover living expenses, are sensitive to monthly payment pressure, intend for long-term ownership, and can judiciously utilize surplus cash flow. On the contrary, it is less suited for those engaged in short-term house flipping, nearing retirement, or seeking to sustain an expensive property using an extended term.
Although President Trump has proposed this plan, there is still a long way to go before it is implemented. The current regulations state that Qualified Mortgages (QM) must have a maximum term of 30 years. To extend it to 50 years, this rule must be amended first; otherwise, banks would face significant risks, and investors would be reluctant to participate.
The two largest “wholesale mortgage providers” in the US, Fannie Mae and Freddie Mac, currently only accept loans with terms of up to 30 years. To popularize the 50-year term, their “procurement rules” must change; otherwise, there would be a shortage of large buyers in the market, leading to expensive prices and low volume. Therefore, FHFA must first allow these entities to acquire or securitize mortgages exceeding 30 years.
Moreover, in principle, with an extended 50-year term, investors are likely to demand higher spreads and liquidity compensation due to longer duration risks. Until Fannie Mae, Freddie Mac, and Ginnie Mae start accepting mortgages exceeding 30 years, the market will find it challenging to establish a large-scale, low-cost source of funds.
To achieve all these, the President, White House, regulatory agencies, Congress, Fannie Mae, Freddie Mac, and various departments must be in agreement. Furthermore, banks at the end of the chain must renegotiate contracts, amortization schedules, risk models, prepayment clauses, IT systems, and staff training, among other requirements.
Lastly, as of the week ending on November 10th, Fannie Mae announced the mortgage rate for a 30-year term as averaging 6.24%. If the 50-year mortgage were to become reality, there is a high probability that the interest rate would be higher. ◇