The Problem with 50 Year Mortgages

President Donald Trump recently proposed 50-year mortgages as a way to make housing more "affordable." The idea sounds good on paper: Lower monthly payments mean more people can buy homes. But here's the reality: 50-year mortgages don't make housing more affordable; they make banks more profitable. They lower your payment but increase the total interest you pay by hundreds of thousands of dollars. It's a scam wrapped in populist rhetoric. The bank wins. You lose. Every single time.

1. The Math Doesn't Lie

Let's do the real math. A $400,000 mortgage at 6% interest for 30 years costs $2,398 per month. Total interest paid: $463,000. The same mortgage for 50 years costs $2,151 per month. You save $247 per month. Sounds good, right? Wrong. Total interest paid: $890,000. You pay $427,000 MORE in interest over the life of the loan. That's $427,000 that goes straight to the bank. The lower payment is an illusion. You're not saving money; you're paying more. A lot more. The bank loves this because they make $427,000 more in profit. You lose $427,000. The math is simple. The choice is yours.

2. The "Affordability" Illusion

The bank and politicians will tell you that 50-year mortgages make housing more "affordable" because the payment is lower. But here's what they don't tell you: You're not actually affording the house; you're just stretching the payments so far into the future that you'll be paying for it until you're 80 years old. If you can't afford the payment on a 30-year mortgage, you can't afford the house. Stretching the term doesn't make it affordable; it makes it expensive. You're paying $427,000 more in interest to have a slightly lower payment. That's not affordability; that's financial servitude. The bank wants you to think lower payments mean affordability. They don't. They mean more interest.

3. The Interest Front-Loading Problem

Mortgages are structured so you pay most of the interest in the early years. On a 30-year mortgage, you pay about 60% of the interest in the first 15 years. On a 50-year mortgage, you pay about 70% of the interest in the first 25 years. This means you're paying interest for decades before you make any real progress on principal. The bank loves this because they get their profit early. You're stuck paying interest for 25 years before you start building real equity. By the time you've paid off half the loan, you're 25 years older and the bank has already collected most of their profit. The front-loading is worse on longer terms. The bank wins. You lose.

4. The Equity Problem

With a 50-year mortgage, you build equity at a snail's pace. After 10 years on a $400,000 mortgage at 6%, you've paid about $258,000 in payments, but only $60,000 went to principal. You've built $60,000 in equity. On a 30-year mortgage, you've paid $288,000 in payments, but $120,000 went to principal. You've built $120,000 in equity. That's double the equity in the same time period. The 50-year mortgage keeps you in debt longer and builds equity slower. The bank loves this because it means you're paying interest longer. You're stuck with less equity and more debt. The bank wins. You lose.

5. The Refinancing Trap

The bank knows you'll probably refinance or move before the 50 years is up. Most people move every 7-10 years. If you refinance after 10 years on a 50-year mortgage, you've paid $258,000 but only reduced your principal by $60,000. You still owe $340,000. If you refinance, you're starting over with a new 30 or 50-year term. The bank gets to charge closing costs again and reset your amortization. They win again. The 50-year mortgage is designed to keep you paying interest forever. The bank knows you won't stay for 50 years. They're counting on it. They want you to refinance so they can charge you more fees and interest. Don't fall for it.

6. The Retirement Problem

A 50-year mortgage means you'll be paying for your house until you're 80 years old. If you buy a house at 30, you'll be paying until you're 80. That's your entire working life. You'll be paying a mortgage in retirement. The bank doesn't care. They just want the interest. But you should care. Retirement is hard enough without a mortgage payment. A 30-year mortgage means you're done at 60. A 50-year mortgage means you're paying until you're 80. That's 20 more years of payments. That's $516,000 more in payments (at $2,151 per month). The bank loves this because it means more interest. You lose because it means less retirement security. The bank wins. You lose.

7. The Housing Market Impact

50-year mortgages don't make housing more affordable; they inflate housing prices. When everyone can "afford" a higher price because payments are lower, sellers raise prices. The $400,000 house becomes a $450,000 house because buyers can "afford" it with a 50-year mortgage. But you're not actually affording it; you're just paying more interest. The bank wins because they make more interest on higher loan amounts. Sellers win because they get higher prices. You lose because you pay more for the house and more in interest. 50-year mortgages don't solve the affordability problem; they make it worse by inflating prices. The bank loves this because it means bigger loans and more interest. You lose because it means higher prices and more debt.

8. The Bottom Line

50-year mortgages are a scam. They lower your payment but increase your total interest by hundreds of thousands of dollars. They keep you in debt until you're 80. They build equity at a snail's pace. They trap you in a cycle of refinancing. They inflate housing prices. The bank wins. You lose. Every single time. President Trump's proposal to make housing more "affordable" with 50-year mortgages doesn't help you; it helps banks. The lower payment is an illusion. You're paying $427,000 more in interest to save $247 per month. That's not affordability; that's financial servitude. If you can't afford a 30-year mortgage, you can't afford the house. Buy a cheaper house. Save more for a down payment. But don't take a 50-year mortgage. The bank is the only one who wins. You lose. Every time.