50-Year Mortgage Explained: Will It Really Make Homes More Affordable?
Home Buyer
Home Buyer
Is the new 50-year mortgage being discussed under Trump’s housing proposal really the answer to our nation’s affordability crisis? As a Bay Area agent who studies the numbers every week, I wanted to unpack what this means for homebuyers here in San Jose and Silicon Valley.
As of this week, we’re seeing roughly 832 active listings and 418 pendings across Santa Clara County. That small dip in pendings is typical for the holiday season when buyers are distracted and listings slow down.
But not everything is cooling. Well-priced homes are still moving fast. Over the last month, nearly every property we listed went under contract—many within the first week and several with multiple offers. Even a fourplex received six offers, showing that demand for quality homes is still strong.
The proposal doesn’t replace the 30-year loan. It simply adds another option: a 50-year fixed mortgage designed to lower monthly payments and make buying more attainable.
Let’s look at a realistic San Jose example:
Purchase price: $1,500,000
Down payment: $300,000
Loan amount: $1.2 million
Interest rate: 5.75 %
If we compare both terms side-by-side:
| Loan Type | Monthly Payment (P&I) | Total Interest Paid |
|---|---|---|
| 30-Year | ≈ $7,000 | ≈ $1,320,000 |
| 50-Year | ≈ $6,100 | ≈ $2,457,000 |
That’s $900 in monthly savings for the 50-year loan, but it comes at a cost of about $1.1 million more in interest over the life of the loan.
A 50-year mortgage might help first-time buyers or younger homeowners who need to get into the market now and plan to refinance later. It could also provide temporary relief for those in high-cost markets like the Bay Area where prices remain elevated.
For short-term ownership—say, two to five years—it may offer breathing room. But for long-term stability, it’s not a practical or wealth-building solution.
Stretching loan terms isn’t the path to true affordability. What we need are lower mortgage rates, sustainable home-price appreciation, and increased housing supply. Without those fundamentals, longer loans simply shift the burden without solving the core issue.
For Bay Area buyers, this means staying informed and strategic. Whether you’re buying your first home or moving up, understanding how these policies affect your payments and long-term equity is key.
The 50-year mortgage might sound like a creative idea, but numbers never lie. Saving a few hundred dollars a month could cost more than a million dollars in the long run.
If you’re thinking about buying in 2025, let’s sit down and go over your options. I can help you model different loan scenarios and create a clear plan that aligns with your goals.
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