but most equity comes again, from the value increase, not principal payments
in 7 years you can gain a tremendous about of equity - especially in coastal regions
50 Year Mortgage
- Thread starter cawacko
- Start date
in 7 years you can gain a tremendous about of equity - especially in coastal regions
Monad Portal
Was it me?
People seldom finish a full mortgage. People also have the option of paying more towards the principal in addition to the required payment knocking years off the contract. I believe home interest will again be deductible so that overall cost is quite a bit less.
cawacko
Well-known member
Finishing the full mortgage isn’t really the issue. The structure is.
A 50 year loan pays down the principal so slowly that it ends up being a bad deal whether you keep it or not. And “just pay extra” kind of defeats the purpose, because if someone can do that they probably don’t need the 50 year option to qualify. Even with interest deductibility, you’re still paying a lot more interest over time.
Monad Portal
Was it me?
Evan starting from back in the day with the 30 year mortgage?
are banker bailouts a warning sign?
your newfound skepticism is fairly amusing.
Trump's doing his best to make that even more difficult with his tariffs. A good amount of the lumber used for new construction comes from Canada. Ditto for steel; we don't make enough here to meet the demand.
That resonates. Think of the interest you would pay over time with a 50-year mortgage. It boggles the mind.
Tbird19482
Verified User
Some people are talking about people in their 70s and older getting a montage and not being able to afford it. well a lot of them could afford the mortgage it is the life ins . they will make them get that they won't be able to afford.
Years ago my dad was in his mid 60s and took a 30 year one and the life ins was as much as the mortgage was.
Dutch Uncle
* Tertia Optio * Defend the Constitution
Trump has meetings and a few big parties with bankers then comes up with the idea of 50 year mortgages. Who benefits the most? The banks.
Average age of an American first time home buyer: 40. Average lifespan of an American male: 76. 40 years old + 50 year mortage = 90 years which is 14 years past life expectancy.
US life expectancy is shorter than most modern nations because our healthcare system sucks. We're #48 on the list below:
Life Expectancy by Country and in the World (2025) - Worldometer
List of countries and dependencies in the world ranked by life expectancy at birth, both sexes, males and females. World Population Life Expectancy with historical chart
www.worldometers.info
Dutch Uncle
* Tertia Optio * Defend the Constitution
Agreed. All the interest is paid up front on a mortgage. That's why, when a person gets a raise, they should apply it to the principle.
Another factor is buying an affordable house, not a MacMansion to keep up with the Jones. I bought a house that I could pay off by age 60, at the time, a mandatory retirement age. Whenever I got a pay raise, I applied it to the principle on a fixed-rate 15 year mortgage. I had work friends who rode the housing speculation market into Bush's Housing Market crash. One couple walked away from it and took the bankruptcy hit. The other ate peanut butter and cottage cheese plus worked extra houses to meet the balloon payments on a house that was underwater on value.
cawacko
Well-known member
Depending on the rate you could end up paying close to double the interest on a 50 year compared to a 30 year. That’s no bueno.
That line resonated with me too because when you keep supply basically fixed and then try to increase access, the cost almost always goes up. The pitch of “we’re making it more affordable” sounds nice on the surface, but it usually works the opposite way.
volsrocks
Verified User
Not really
Rent goes up the house pmt wont?
Rent will be way more in 10 yrs your pmt will be the same
Maybe, maybe not. It is highly unlikely that in 10 years you'll be paying double what you started with. On the other hand, a 50 year mortgage will have you paying twice the selling price of the home.
This only matters if you keep that original mortgage and never improve your situation. Seriously. It's like people think this is a zero sum game. You get a mortgage and then everything freezes that way and you cannot change anything... Suddenly every HELOC, every other mortgage you might get later vanishes from existence because you got a 50 year mortgage.Maybe, maybe not. It is highly unlikely that in 10 years you'll be paying double what you started with. On the other hand, a 50 year mortgage will have you paying twice the selling price of the home.
Saying that "some people" might have trouble doing that doesn't change that this is the normal pattern of mortgages since their inception.
I imagine that in the 1950s with the advent of VA Loans and the 30 year mortgage we had much the same arguments we are having about the 50 year suggested new term for first time buyers... Previous to that Mortgage terms were usually 3 to 10 years pre 1930s and from 1940 to when the FHA created the 30 year term it was 15 to 20 years...
And yes, when 30 year mortgages came about the exact same arguments "against" them were made.
That's true. If they're ever offered, I would advise my own kids not to bite. But to each their own. It's quite possible to pay off that 50 year (or any other term) mortgage early, saving yourself thousands in interest. But if you have the means to do that, why not get a shorter term note, or refinance?
The problem with your example is that the math doesn't work.
The value of your home will go up at the same rate as a similar home. That means that you will pay for your new home what you got for your existing home. You would be in the exact same place by simply staying in your home for 50 years. You might get lucky and have interest rates fluctuate to make the sale and purchase advantageous but you could do the same thing by simply refinancing. Then you have to take into account that you are paying real estate broker fees every time you sell you home so you lose equity that way. In the long run without adding value to the home you are living in you would lose money or be required to pay higher and higher monthly payments by trying to sell and repurchase as a way to make this work.
T. A. Gardner
Serial Thread Killer
Only if you stay in the same market or don't delay the new purchase and wait for the market to level out or go down. You could also choose a less expensive house giving you more equity on move in. There are lots of options that don't involve you just breaking even on the purchase.
Usually you do. Of course your first mortgage is never your "forever home"... Well, it's possible it is, so I should say "almost never". It is far more likely they sell and use the equity to down payment and get a 20 to 30 year mortgage, then keep going. HELOCs to buy cars, etc.
I would not tell anyone not to leverage their equity, you should.
I wouldn't tell them not to. If it is what it takes to get them into a home rather than paying someone else's mortgage plus a little more for rent, I would go for it.
cawacko
Well-known member
Generally speaking, that’s the pro ownership position.
In the case of the 50 year mortgage however, the first couple of decades are essentially like rent as you build up so little equity. And with how much interest you pay over the life of the loan, the usual ownership benefits just aren’t there.