Former Obama economic adviser Betsey Stevenson waded into the debate over President Donald Trump's proposed 50-year mortgage on Monday, warning that while such loans might help some buyers, they would almost certainly mean steeper borrowing costs and painfully slow equity gains.
Stevenson Warns Of Costly Long-Term Home Loans
"50-year mortgages might be good for some people, but the people assuming interest rates will be the same as on a 30 and who fail to recognize people will be contributing very little to equity in their home for years because payments will be covering all that interest are driving me bonkers," Stevenson wrote on X.
Her comments came as Trump and Federal Housing Finance Agency Director Bill Pulte signal they are "working on" a government-backed 50-year product they say could ease housing affordability, building on a plan Trump has promoted as a potential "game changer." The idea would complement broader housing and mortgage moves Trump has tied to helping younger buyers, including changes to Fannie Mae and Freddie Mac.
Economist Urges Clearer View Of Ownership Costs
In a follow-up thread, Stevenson said she is "not actually against a 50-year mortgage," but urged a clearer accounting of annual ownership costs, where she accounts for 1%–4% for depreciation and property taxes and roughly 6% in real-estate fees when people move, adding, "Renting can save you a lot of money! And yes, interest rates on a 50-year will be higher."
She suggested that "a better way to get people into housing" would be to set payments "in real, rather than nominal terms," while still giving people every opportunity to borrow.
Analysts Highlight Slow Equity Gains On Mortgages
Estimates by Econbeat's Mortgage Corner show that stretching a $500,000 loan from 30 to 50 years at today's rates nearly doubles total interest, even before accounting for the higher rate a longer loan would likely carry.
That math also aligns with concerns raised by Brandon Avedikian, founder of Houston-based Aspire Commercial, who noted on X that only about 5% of early payments on a 50-year loan go toward principal, compared with roughly 17% on a standard 30-year mortgage, meaning borrowers build equity extremely slowly.
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