Overview
- Credit expert Micah Smith cautioned that stretching loans to 50 years could leave unsavvy or vulnerable borrowers one market shift from being underwater and slow their equity build dramatically.
- Modeling cited across outlets shows modest monthly savings contrasted with much higher lifetime interest, including UBS estimates of interest totaling roughly 225% of a home’s price and only about 11% principal paid after 20 years.
- A Washington Examiner example found a 50-year loan cut a sample payment by about $159 a month versus 30 years, but it more than doubled total interest, reinforcing concerns about long-term borrower costs.
- HousingWire analysis argued any 50-year product would likely carry a rate premium over 30-year loans, shrinking monthly savings and leaving far less equity after a decade of payments compared with conventional terms.
- Regulatory barriers remain substantial, with current CFPB rules limiting Qualified Mortgages to 30 years and GSEs and FHA allowing 40-year terms mainly for modifications, as investor Grant Cardone promotes the idea as an opportunity and economists warn it could inflate prices without more housing supply.