A proposal from the Trump administration to introduce a 50-year mortgage product aimed at improving housing affordability may offer immediate monthly savings for homebuyers. However, a recent analysis by John Lovallo of UBS Securities suggests those savings could come at a steep price: nearly doubling the total interest paid over the life of the loan.
Lovallo notes that major details of the proposal remain unclear, but his preliminary calculations reveal a stark trade-off. Extending mortgage terms from 30 to 50 years could lower the monthly payment on a median-priced home by roughly $119, enhancing short-term affordability for buyers facing high housing costs.
However, this extended repayment schedule would dramatically increase the overall debt burden. According to the UBS analysis, homebuyers could pay nearly twice as much in interest compared to a conventional 30-year loan. A slower pace of equity accumulation is another significant downside, weakening the long-term financial benefits of homeownership.
Demographics further complicate the picture. UBS points out that the average first-time buyer is now about 40 years old, meaning many borrowers might not live to see their mortgage fully paid off.
“It’s typically not a goal of policymakers to pass on mortgage debt to a borrowers’ children,” Mike Konczal, senior director of policy and research at the Economic Security Project, told the Associated Press. The AP’s own calculations reached a similar conclusion, estimating that the average borrower could end up paying roughly $389,000 more in interest with a 50-year mortgage than with a 30-year alternative.
A separate analysis by LendingTree also highlighted how dramatically the interest burden would expand. For example, a $500,000 mortgage at 6.1% would accumulate $1.1 million in interest over 50 years. And in the event home prices fall, homeowners could be stuck underwater for far longer. What may initially appear as an affordability boost, the outlet explained in a statement to Fortune, risks trapping buyers “in half a century of debt and delay wealth-building for an entire generation.”
Breaking Down the Numbers
The UBS analysis, conducted by Lovallo’s team members Spencer Kaufman and Matthew Johnson, is based on a median home price of about $420,000. With a 12% down payment of $50,400, the remaining loan balance comes to $369,600.
For comparison:
- A standard 30-year mortgage at 6.33% would result in a monthly payment of $2,295.
- A proposed 50-year mortgage, estimated at a higher 6.83% rate, would reduce that payment to $2,176.
Lower payments could expand purchasing power significantly. UBS estimates a buyer could afford a home priced up to nearly $443,000 while keeping monthly payments equal to the 30-year benchmark.
Yet multiple structural and regulatory challenges surround the viability of a 50-year mortgage. Fannie Mae and Freddie Mac—still in conservatorship—would need to determine whether these loans could be purchased and securitized. In addition, any effort to revise federal rules, such as the Dodd-Frank Act, to classify ultra-long mortgages as qualifying loans could face resistance. Without such adjustments, interest rates are likely to remain higher for 50-year products.
Is Government Intervention the Real Solution?
UBS suggests that focusing on loan structure may be missing the bigger issue. In concluding its analysis, the firm reiterated its earlier finding: the U.S. housing market has become so inefficient and supply-constrained that the most direct path to improved affordability is increased government investment in housing infrastructure.
That includes expanding the use of manufactured wall panels—technology that could accelerate building schedules and reduce waste. UBS estimates widespread adoption could cut framing time by as much as 30% and decrease construction waste by 20%. However, the private sector has shown reluctance, given an estimated added cost of $783 per home.
Despite the attention the mortgage idea is receiving, the policy may be losing traction already. President Donald Trump downplayed its significance during a Fox News interview on Tuesday, calling it “not a big deal” and suggesting it “might help a little bit.” ResiClub editor Lance Lambert also noted pushback from Trump supporters in his broader analysis of the proposal.
