Federal Housing Finance Agency chief Bill Pulte called the proposed 50-year mortgage a “complete game changer.” UBS Group AG analysts agree — but not necessarily in a good way.
In a note published Nov. 10, UBS analysts John Lovallo, Spencer Kaufman, and Matthew Johnson said extending a traditional 30-year mortgage to 50 years could roughly double the total interest a borrower pays over the life of the loan, reported Bloomberg.
Affordability Boost Comes At A Price
President Donald Trump’s idea, which came days after his party lost key elections centred around the cost-of-living crisis, has drawn controversy and outrage — even from members of his own party.
“All it means is you pay less per month,” Trump said in an interview on Monday.
While the longer term could make homeownership appear more affordable — lowering monthly payments by about $119, or boosting purchasing power by nearly $23,000, UBS warned that buyers would build equity far more slowly and remain in debt for decades longer.
The analysis assumes a median U.S. home price of about $420,000 with a 12% down payment. Interest rates were modeled at 6.33% for a 30-year mortgage and 6.83% for a 50-year loan.
LendingTree conducted a similar analysis. For instance, it found a $500,000 loan at 6.1% would rack up $1.1 million in interest.
See also: Trump’s 50-Year Mortgage Plan Sounds Great Until You See The Interest Bill
Longer Loans, Slower Wealth Building
UBS analysts suggested that if the idea advances, government-sponsored enterprises such as Fannie Mae and Freddie Mac could buy and securitize 50-year mortgages, similar to existing 30-year products. However, the loans may not qualify under Dodd-Frank rules and could carry a premium borrowing rate.
The analysts also highlighted one practical concern: with the average first-time homebuyer now around 40 years old, many borrowers could still be repaying their mortgages well into retirement — or even beyond. Longer loan terms also mean slower equity accumulation, potentially delaying wealth building and reducing homeowners’ long-term financial gains.
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