Overview
- President Donald Trump publicly floated a 50-year home loan concept and FHFA Director Bill Pulte praised it as a “complete game changer,” though no implementation plan has been laid out.
- UBS modeling indicates extending loans to 50 years could roughly double total interest, offer only modest monthly savings of about $119 or slightly higher purchasing power, and keep many buyers in debt into retirement given first-time buyer ages near 40.
- Mortgage pros and academics say longer terms slow equity accumulation and could reduce turnover, with some warning the approach fails to fix the core supply shortage and elevated rate environment driving unaffordability.
- Key hurdles remain, as loans longer than 30 years do not currently fit Dodd-Frank and GSE purchase rules, leaving questions about required regulatory changes and whether Fannie Mae or Freddie Mac would securitize such debt.
- Rate impacts are uncertain: lenders expect a premium for extra risk, but bond-market history and research cited by the San Diego Union-Tribune suggest the yield gap versus 30-year debt could be small, leaving pricing dependent on investor appetite.