Affordability has been the big headline for years now – and honestly, for good reason. Between fast home-price growth, tight inventory, and mortgage rates that aren’t exactly doing us favors, it’s become harder for everyday buyers to comfortably step into the market.

Just a quick reminder: These articles I share here are researched and written by me! As part of my commitment to ongoing support for my clients and partners, I write these articles to help them understand what’s really happening in the markets, beyond the headlines and soundbites.

So every now and then, someone floats a “big idea” to help.

Lately, that idea is the 50-year mortgage.

At first pass, it sounds reasonable enough. Stretch the mortgage out longer, and the monthly payment goes down. Simple, right?

Well… not really.

Small Savings Up Front, Big Cost Later

Yes, a longer term trims the monthly payment a bit. But when you run the numbers, the tradeoff is hard to ignore.

• A 50-year mortgage saves about $40/month for every $100,000 borrowed compared to a 30-year.

• But after 10 years, you’ll have paid around $7,000 more in interest per $100,000.

Forty bucks a month is nice, but it doesn’t offset thousands in extra interest – especially when most people don’t keep a mortgage anywhere close to 50 years.

Equity Builds at a Snail’s Pace

Another piece that doesn’t get talked about enough: how slowly you build equity on a 50-year term.

With so many payments stretched out over so many years, the early monthly payments are almost entirely interest. In the first 5 – 10 years, you’re barely touching the principal.

So where does early equity come from?

Basically from home-price appreciation – which brings us right to the next point.

It Could Actually Push Prices Higher

Affordability is ultimately a price problem. We don’t fix price problems by making borrowing cheaper – we just end up bidding prices up again.

We watched this happen in 2020 and 2021. Increasing demand will never slow price growth in the housing market.

Rates dipped into the 2s and 3s, and buyers suddenly had more room in their payment. That extra room didn’t lead to cheaper housing. It led to more competitive offers and higher prices, fast.

A 50-year mortgage risks doing the same thing.

It feels like help, but ironically, it could worsen the very problem it’s trying to solve.

What Actually Improves Affordability?

Unfortunately, there’s no “silver bullet” here. Fixing affordability – without massive intervention to the market – is slow work:

• Home price growth needs to cool off
• Wages need to grow
• Supply needs to improve
• And policy changes – like zoning or regulatory reform ,or incentives for more building – can meaningfully help

These take time, but they get to the heart of the issue instead of papering over it.

If you find this interesting or helpful, please feel free to share it with a friend, family member, or co-worker – it’s my goal to educate and empower as many people as possible during this incredibly unique time in housing!

Here is how I can help!

• If you are looking to purchase a new home or have questions about your mortgage, the market, getting preapproved, etc., or
• If you are a Realtor Broker, or Financial Services Professional looking for a lender with great financing solutions to help educate your clients on the state of the market to help them feel good about their decisions,

Please call today – I am happy to help however I can!

I am a twenty-year veteran of the mortgage and real estate industry. My experience across nearly all aspects of real estate makes me an incredibly well-rounded problem-solver. My clients are treated to a white-glove client experience every single time. Education, information, and communication are the cornerstones of my approach.

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📧 brian@goforwardmortgage.com
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