Name: Trump proposed a 50-year mortgage. Heres what it means for homeowners
Uploaded: 2025-11-11T17:17:41.070Z
Duration: 3 min 21 s
Description: In another attempt to make homebuying more affordable, Pres. Trump floated the idea of a 50-year mortgage. In response, Federal Housing Finance Agency director Bill Pulte, who oversees Fannie Mae and Freddie Mac, posted that they are “working on it,” and that it would be, “a complete game-changer.”

In another attempt to make homebuying more affordable, Pres. Trump floated the idea of a 50-year mortgage. In response, Federal Housing Finance Agency director Bill Pulte, who oversees Fannie Mae and Freddie Mac, posted that they are “working on it,” and that it would be, “a complete game-changer.”

Washington

President Trump has proposed a 50-year fixed-rate mortgage as a way to make homeownership more affordable by reducing monthly payments. Using current median home prices and interest rates, such a mortgage could lower payments by over $200 per month compared to a traditional 30-year loan, but would result in slower equity accumulation and significantly higher total interest paid.

Experts and realtors have expressed skepticism about the effectiveness of the proposal, noting minimal savings and potential challenges in developing a secondary market for such loans. Additionally, 50-year mortgages do not currently meet the definition of a qualified mortgage under federal regulations, and any changes to allow them would require congressional approval and could take up to a year.

Trump proposed a 50-year mortgage. Here's what it means for homeowners

In an attempt to make home buying more affordable, President Trump floated this idea of a 50-year mortgage in a social media post. The purpose of a longer-term fixed-rate mortgage would be to lower the monthly payment for homeowners. The longer the term of the loan, the smaller the principal needed each month to pay it off in full. Using the latest median sale price of a home from September, $415,200, according to the realtors, and the current interest rate of about 6.3%, according to Mortgage News Daily. On a 30-year fixed loan with a 20% down payment, the monthly payment of just principal and interest would be $2,056. Now, if you raise the length to 50 years at the same interest rate, that payment would be $1,823, and that's a savings of $233 a month. Homeowners, however, wouldn't build equity as quickly, and that's because their principal payments would be smaller, and the amount of interest that they're paying to lenders would actually be 40% higher. Homeowners could still gain equity through home price appreciation, but home prices have been softening swiftly across the nation this year, with nowhere near the appreciation seen in the years before. Now, even realtors agree that the savings to homeowners would be minimal. Joel Berner, a senior economist at Realtor.com, said in a release, this is not the best way to solve housing affordability. The administration would do better to reverse tariff-induced inflation, which is keeping the rates on existing mortgages high. The average age of a typical first-time buyer in 1991 was 28. By last year, it had reached 38, according to a new report from the National Association of Realtors, whose deputy chief economist called the number, quote, shocking. Then there's the question of what's the mortgage rate? The average rate on the 15-year fixed mortgage is currently 66 basis points lower than the rate on the 30-year fix. But this would kind of imply that the rate on the 50-year fix would be higher. It all depends on investor demand for the product, of course. I spoke with Matthew Graham at Mortgage News Daily. He told me there is not currently a secondary market for these loans, nor would a robust secondary market be cultivated anytime soon. That means that in addition to the extremely low amount of principal paid down in earlier years of the loan, the interest rates would also be quite a bit higher than 30-year loans. He calls that a double whammy for those with any hope of building home equity. Graham also said that for all practical purposes, the loan would be more like an interest-only loan because very few people would keep a home for 50 years. The real question, though, is can Fannie Mae and Freddie Mac actually do this? Now, analysts say it's possible, but a 50-year mortgage does not currently meet the definition of what is called a qualified mortgage, and that's under the Dodd-Frank Act. It gives investors a backup from Fannie and Freddie if that loan goes bad, as in the homeowner doesn't pay. But regulators were given the authority to change that in order to ensure mortgage affordability. That, however, could take a year, according to Jarrett Seberg of TD Cowen. That's because they need congressional approval.

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