General Discussion

The problem with a 50-year mortgage, to be clear, is that it does nothing to solve the root issues. Yes, you’ll have a lower monthly payment since the timeline is longer, but it’ll take you longer to build equity and you’ll pay double the amount of interest as someone with a 30-year mortgage, according to one analysis. Fifty-year mortgages could also increase housing prices in the long run by encouraging people to buy more expensive homes.

“A 50-year mortgage inherently carries more risk, which is why it would have a higher interest rate than a 30-year mortgage,” explains Berner. "This could also combine with some of the other dynamics of the 50-year mortgage to make defaults riskier. In a situation where home values fall, on a 50-year mortgage where the homeowner has less equity in their home, they’re more likely to end up ‘underwater,' owing more on their home than it’s worth.”

Ultimately, as Yun explains, longer loan terms don’t actually address the “affordability challenges” faced by homeowners today. “Limited supply of homes in the low- and middle-price ranges” is the real hurdle.

A mortgage that stretches two decades beyond today’s 30-year norm would also come with the major drawback of making a significant dent in leaving generational wealth.

“Because equity accumulation is slower, in a situation where a homeowner passes away after a certain number of years of paying off a mortgage, if that homeowner has a 50-year mortgage, they will pass down less ownership of the home and more debt than they would on a 30-year mortgage,” Berner explains.