ORLANDO, Fla. – About few weeks ago, President Donald Trump floated the idea on social media of 50-year mortgages, proposing loans that would stretch a homebuyer’s payments to half a century.
The announcement quickly ignited a nationwide debate about whether longer mortgage loan terms would help or further strain an already stressed housing market.
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On the one hand, a 50-year mortgage would reduce monthly payments, potentially the difference between affording a home or staying put. On the other hand, those same longer terms would mean homeowners would be paying out more interest on the loan for a longer period.
The administration framed the concept as “a complete game changer” – a bold affordability solution at a time when high interest rates and record home prices have pushed millions of would-be buyers to the sidelines.
A few days after Trump’s announcement, Federal Housing Finance Agency Director Bill Pulte went even further, teasing an initiative that could reshape how Americans borrow: portable mortgages, which would allow homeowners to move from one property to another without giving up their existing loan or interest rate. Supporters say it’s a way to get the housing market back on track – critics say portable mortgages could make the housing crisis even worse.
Like them or not, the two ideas represent one of the most significant potential shifts in U.S. mortgage policy in decades, with enormous financial, economic, and political implications. And for many economists, mortgage analysts, and consumer advocates, the questions raised are familiar because America is already living in a version of this story: ultra-long car loans.
Buckle-up buttercup: we have lots to cover.
A Housing Market Under Pressure
Housing affordability has collapsed across the U.S.
Period.
Mortgage rates recently hit their highest levels in the past two decades as home prices have soared far faster than incomes. Millions of owners are “rate-locked” into older mortgages (some below 3%), and won’t trade cheap debt for higher-interest loans, bottlenecking the market. Even after a couple of recent Fed rate cuts, the housing market has barely moved.
The slump in home sales has loomed large for Trump 2.0, and the president hasn’t been shy about publicly criticizing the Fed and today’s high interest rates. That frustration appears to be driving the administration’s search for bold ideas to revive the housing market – a debut initiative that could shape the early narrative of Trump’s second term. But according to CBS News, the White House wasn’t fully prepared to roll this plan out when it suddenly surfaced. Regardless – what’s done is done – so let’s get into the nitty-gritty of the administration’s idea.
What Exactly Is a 50-Year Mortgage?
A standard mortgage in America is 30 years. The roots of 30-year mortgages can be traced back to President Franklin Delano Roosevelt in the 1930s with his New Deal policies aimed at getting unemployment down and the economy back on track after the stock market crash of 1929.
Before FDR’s reforms, home buyers were expected to have a down payment of about 50% for home purchases, with a typical mortgage running only three to five years, having a variable interest rate, and payments covering only the interest on the loan. After the term was up, homeowners were left with a big payment, which led to re-upping for another loan and the cycle starting all over again. That worked when banks had money – after October 1929, guess what no longer worked?
Thirty-year mortgages didn’t magically appear overnight when Roosevelt was president – they instead matured over decades culminating in the 1970s with the creation of Freddie Mac (Fannie Mae was created in 1938). The two government-sponsored enterprises are authorized to buy mortgages from banks, freeing up funds to issue more loans (effectively keeping interest rates down and stabilizing the market).
Trump’s idea of a 50-year mortgage is based on simple math: to make home buying more affordable for first-time buyers and middle-class families, reduce the monthly payment by lengthening the term of the loan. A 30-year mortgage runs 360 months. A 40-year mortgage, something that already exists but is considered a non-qualified mortgage (non-QM) loan, runs 480 months. A 50-year mortgage would last 600 months.
But what works politically doesn’t always work financially.
Stretching a loan term dramatically increases the total interest paid, slows down equity growth, and keeps borrowers in debt far longer. Another thing most people don’t consider: a longer loan probably means a higher interest rate which essentially wipes out any perceived savings.
On first glance, it may make monthly payments look cheaper, but it makes the home vastly more expensive over time. If a family moves every 7–10 years (as most Americans do) a 50-year mortgage means they may never reach meaningful equity before moving again.
And one more historical tidbit: Japan experimented with ultra-low-interest 50-year and 100-year multi-generational mortgages back in the 1980s. You know why you didn’t know that – those loans fell apart during Japan’s housing crisis in the 1990s.
How Much Would a Home Cost Under 15, 30, 40, and 50-Year Mortgages?
According to the National Association of Realtors, in September 2025, the average selling price of a home in the U.S. was $415,200. Let’s assume that a buyer was able to put down 10% on the home ($41,520) and the loan was for $373,680.
Trump’s basic idea is draw out the loan and you’ll pay less each month. So – let’s look at what that would look like if all loans had the same interest rate of 6.25% (baseline):
This follows Trump’s logic – stretching out a loan for 40 or 50 years is cheaper per month than a 30- or 15-year loan. A 15-year loan will also save you a lot of money in the long run.
However, Trump’s logic is flawed: 15-, 30-, 40-, and theoretical 50-year mortgages would not all have the same interest rate. 15-year loans will have a lower rate, a 30-year loan would be standard (our baseline for this example), and both 40- and the theoretical 50-year loans will have a higher interest rate.
Now, let’s look at that chart again with the new rates plugged in and again, using the 30-year loan as the baseline:
· 15-year rate: 5.0%
· 30-year rate: 6.25% (baseline)
· 40-year rate (non-QM): 7.0%
· 50-year rate (hypothetical): 7.5%
So, concentrating strictly on a 50-year mortgage versus a traditional 30-year mortgage, what are the key takeaways?
· Monthly payment difference: $91.61 per month MORE than a 30-year loan
· Total interest paid difference: $607,162.61 over the life of the loan
Let me spell this out: opting for a 50-year loan not only draws out the loan terms for a longer period of time, but the borrower would pay $91.61 more each month over the course of 50 years. In the end, the loan will cost an additional $607,162.61 in interest.
Close your mouth, you look silly.
And then there’s equity, the portion of your home that you own. Let’s say for the simplest of examples, your home costs $100 and you put in a down payment of $50. Right off the bat, you have 50% equity in your home (you own 50% of it). As you make more payments on the home, your equity increases.
Every month, part of your mortgage payment goes towards interest, and some toward principal. Every month, the value of your home could go up, or it could go down. Every month, as you get closer to paying off your loan, you reduce
interest and pay more towards principal. In the real world, the combination of equity, mortgages, increasing home values, decreasing home values, and interest on the loan makes the formula far more complicated.
Amortization is simply the schedule of how your loan balance declines over time as you pay down principal. To break down how equity is stretched out over the length of a loan, look at this chart:
What can be concluded from this chart: longer loan terms have a direct effect on how long it takes you to build up equity.
The Yes-You-Can-Take-It-with-You Portable Mortgage
As previously mentioned, shortly after President Trump’s post on Truth Social regarding the idea of 50-year mortgages, Federal Housing Finance Agency Director Bill Pulte seemed to double down on the idea of reinventing the mortgage landscape with the idea of a portable mortgage. The logic: high interest rates were holding people back not only from buying homes but also from selling homes. Is it worth leaving one home and an existing low-interest mortgage for another home with a higher interest rate loan?
Pulte’s logic is that a portable mortgage would allow a homeowner to transfer their existing mortgage, interest rate and all, to a new home when they move.
Instead of paying off the old loan (and losing a low rate), the borrower keeps it and applies it to the new property, of course subject to lender approval.
The anti-portable mortgage phenomenon is being an owner with a “rate-locked” mortgage. Quite simply, millions of Americans don’t want to give up their old 2–3% mortgages (common during the pandemic), for higher 6-7% mortgages. So, they’re sitting still, choking housing inventory.
Portability (or being able to port a mortgage) could free up homes by encouraging movement, help buyers upgrade without taking on today’s higher rates, and significantly reduce housing gridlock.
But the challenges to portability are significant.
Most mortgages have a “due-on-sale” clause that triggers payoff when you sell. Neither Fannie Mae nor Freddie Mac currently supports portable mortgages and both lenders and investors would face new risks. And then there’s the idea of how to implement all of this: is it only for new loans, can you modify an old loan, and what happens when the existing mortgage doesn’t match up with the outstanding balance on a new home? America’s entire home loan system would need a major overhaul.
Portable mortgages, however, are in place in other countries like Australia, Canada, Germany (assignable fixed-rate loans), and the United Kingdom.
In Canada for instance, most fixed-rate mortgages are fully portable and can be transferred to new properties (existing rate, term, and remaining balance). If more money is needed, lenders can opt for a “blend and extend” loan combining the old rate with a new one, extending a term, and keeping the loan continuous. These types of loans work well for Canadians because unlike our standard 30-year term mortgages, most Canadians have shorter term loans that reset every one to five years like the U.S. had back in the early 20th century.
The Car Loan Comparison: America Has Seen This Act Before
When word spread of the idea of extending mortgages to 50 years, housing industry experts were quick to point out the eerie parallel to the auto industry. Decades ago, the norm for a car loan was 36–48 months. As prices increased, terms stretched first to 60 months and then 72 months. Fast forward to 2025, where the average price of a new car is now over $50,000 and it’s not uncommon to see SUVs and pickup trucks priced well above $60,000. We now live in the time of 84-month car loans.
Eighty-four months: that’s seven years. Buy a new car in 2025 with an 84-month loan and it won’t be paid off until 2032. And yes, some lenders even offer 96-month car loans.
Longer-term auto loans solve the payment problem, but don’t solve the affordability problem. Housing advocates warn that the same dynamic could happen with a 50-year mortgage: the immediate advantages are lower payments, but slower equity growth, and the potential of long-term debt traps. Longer term loans don’t make things cheaper – they just make payments smaller.
They also encourage higher prices.
If no one was buying a mass-market $60,000 Toyota Camry because it was too expensive, Toyota would figure out a way to make a much cheaper Camry. Don’t believe me, read up on how Stellantis basically overpriced their vehicles last year and had to do an abrupt about-face to get back on track.
Conclusion
Potential benefits of a 50-year loan and/or a portable mortgage:
✔ Could reduce rate-lock housing shortages: portability could free up home movement, encouraging listings and potentially easing supply constraints
Potential pitfalls to a 50-year loan and/or a portable mortgage:
X Massive increase in total interest: an additional $600k in our example
X Higher interest rate: wipes out any savings for extending the terms of the loan
X Slower equity build: it will take longer to own your home
X Potential price inflation: if buyers can borrow more, sellers can ask more (we’ve seen this with long-term car loans)
X Two-tier mortgage system: traditional 15- and 30-year borrowers build wealth faster; long-term borrowers may fall behind over time
X Market and regulatory uncertainty: no one really knows how this would play out, a lesson learned with balloon payment loans in the mid-2000s
A 50-year mortgage, paired with portability and non-QM long-term loan options, could change who gets to buy a home, when, and at what cost. But as America learned through the evolution of car loans, longer terms can reshape markets in ways policymakers may not fully anticipate.
Ultra-long loans offer relief but also raise the price of admission. For now, the questions are simple: will the White House formalize the 50-year mortgage proposal and will lenders, regulators, investors, and borrowers sign on?