Trump administration weighs 50-year mortgage plan

The Trump administration is considering a major change to the housing market — introducing a 50-year mortgage option for homebuyers.

(NBC)- The Trump administration is considering a major change to the housing market — introducing a 50-year mortgage option for homebuyers. The proposal aims to make homeownership more affordable by lowering monthly payments, but experts warn it could cost borrowers far more in the long run.

“The younger generation isn’t probably gonna end up with the house paid off,” said New York resident John Scarlato.

Others, like Ann Birmingham of Vero Beach, Florida, see the plan differently. “I think it’s a great idea. I think it makes more affordability for more people,” she said.

Mortgage experts caution that while smaller payments may help in the short term, the interest paid over time would be substantially higher. Barbara Guerriere, a home loan consultant with Valley Bank, noted, “You’re paying increased interest toward it. It also slows the build-up of equity in the home.”

According to Fannie Mae’s mortgage calculator, a $500,000 loan at 6.3% interest over 30 years would cost about $3,101 per month, totaling $616,000 in interest. Extending that loan to 50 years at 6.8% would lower monthly payments to $2,932, but nearly double the interest to $1.2 million over the life of the loan.

Experts say the extended-term mortgage could make sense for people who don’t plan to stay in their homes long-term. “Even if they sell it, they’d still acquire equity, and real estate is really a good investment,” Birmingham said.

Guerriere added, “Historically, most people aren’t in their homes forever — we always say that seven-to-ten-year rule.”

The administration has not yet provided details on when the proposal might be introduced or whether federal mortgage lenders like Fannie Mae or Freddie Mac would participate.