Why Trump’s push for a 50-year mortgage could backfire

• Trump’s idea for a 50-year US mortgage probably won’t help the US housing market in the long run.
• A longer mortgage term might make monthly payments a bit cheaper, but it won’t address housing supply.
• It could actually backfire by pushing up home prices over time, housing experts say.

Donald Trump has a new idea to boost the US housing market: a 50-year fixed-rate mortgage.

The president floated a new, longer-term mortgage in a post on Truth Social over the weekend. Bill Pulte, the Federal Housing Finance Agency director, confirmed that the FHFA was working on the new borrowing plan in a separate social post.

“Thanks to President Trump, we are indeed working on The 50 year Mortgage – a complete game changer,” Pulte wrote on X.

The problem? It might not do much to fix America’s housing affordability crisis, according to Daryl Fairweather, the chief economist at Redfin. In fact, it could even backfire in the long run.

“I think what the government is trying to achieve is increasing access to the housing market, especially for younger home buyers who have been priced out by high interest rates and high home prices. But it does come with some drawbacks,” Fairweather told Business Insider in an interview.

It’s unclear how the administration would allow borrowers to get a 50-year mortgage. If the FHFA steps in to expand the credit criteria of Fannie Mae and Freddie Mac, it would open the door for the government-sponsored enterprises to buy the mortgages from lenders and package them into mortgage bonds, providing liquidity for lenders.

Here are some of the problems housing experts see with Trump’s idea.

1. It’s unclear if a 50-year mortgage is even possible

For starters, it’s unclear whether creating such a mortgage product is realistic, Fairweather said.

That’s because longer mortgages tend to be riskier, as borrowers could are more likely to encounter trouble over a longer time horizon, Fairweather said.

Trump’s idea may be to have the government-sponsored mortgage buyers, Fannie Mae and Freddie Mac, back 50-year mortgages, she speculated. Yet, that means taxpayers are exposed to any problems that arise with the new mortgages.

“I’m not even sure if it makes sense for this to be something that Fannie Mae and Freddie Mac are insuring, or if it’s something that they’re floating as a non-qualified mortgage product,” Fairweather said.

It would also require approval beyond the presidential level, she said, given that the Consumer Financial Protection Bureau limits qualified mortgages to loan terms that are 30 years or under.

2. Savings would be meager, interest would be higher

A 50-year mortgage could lower mortgage payments slightly, as homebuyers are spreading out the principal of their home for a longer period of time. But savings would likely be meager at best, Fairweather said, depending on the spread between the 50-year and 30-year mortgage.

According to Fannie Mae’s mortgage calculator, a 6% interest loan on the median-priced home with a down payment of 20% would come out to a monthly payment of $2,903 for a 30-year mortgage, compared to $2,648 on a 50-year loan.

Also, since longer mortgages are considered to be riskier, Fairweather said she would expect the 50-year fixed rate to be significantly higher than the 30-year fixed rate.

“I think the spread would be significant, and it would mean that borrowers might be saving, say, $40 a month on a monthly mortgage payment, but signing up for much higher interest over the life of the loan,” she said.

3. Home prices could rise

There’s good reason to believe that a 50-year mortgage could ultimately backfire by making home prices rise, Fairweather said.

If such a mortgage product were to be offered, Fairweather thinks it could temporarily expand access to the housing market, particularly for younger homebuyers who are eager to own property and figure they can refinance later to get a better rate.

However, greater demand for mortgages without an increase in supply will likely cause home prices to rise, she said, as competition for available inventory on the market will rise.

“I think if the goal is to get people access to home ownership because we believe home ownership is this great vehicle for accumulating wealth, the 50-year mortgage could actually defeat that purpose because people would have a harder time accumulating wealth,” Fairweather said, though she noted that the actual impact would depend on where the 50-year rate ends up.

Most economists would agree that increasing the supply is the only way to meaningfully improve affordability, Fairweather added.

Housing supply is starting to come into better balance as mortgage rates tick lower, but the housing market is still short on inventory. The US is on track to be short 1.1 million units by the end of the year, down from a 1.6 million unit shortage at the end of last year, according to Ned Davis Research.

Meanwhile, real estate economists don’t expect borrowing costs to ease significantly anytime soon. Redfin predicts that the 30-year fixed mortgage rate would hover between 6% and 7% for the rest of 2025.

In October, Zillow economists said they believed the 30-year mortgage rate would likely remain above 6% through 2026.