A 50-year Mortgage is Stupid
Are First-Time Home Buyers Really Getting Older Or Just Shut Out? | Mortgage Purchase Applications Rise
50-Year Mortgages: A Poor Choice For a Slightly Lower Monthly Payment
As policymakers debate whether to support 50-year mortgages, home buyers should look beyond lower monthly payments and consider what a 50-year loan could cost over its lifetime.
Some bankers, builders, and real estate agents might think a 50-year option is a good idea, but who are they looking out for? Proponents of the 50-year albatross say it’s a tool to address the housing affordability crisis. Nonsense!
The idea behind today’s standard 30-year, fixed-rate mortgage is to pay it off during your working years. A 50-year loan would stretch that commitment by two decades. Under current federal rules, Fannie Mae and Freddie Mac cannot insure mortgages longer than 30 years, so any future 50-year products would likely sit on the margins of the market unless Congress changes existing law.
Proponents point to the appeal of smaller monthly payments. On a hypothetical $420,000 home with 20 percent down, one analysis found that at a 6.3 percent rate on a 30-year loan, principal and interest run about $2,080 per month. A 50-year loan likely would have a higher interest rate. At a 6.8 percent rate over 50 years, that payment drops to roughly $1,970, saving about $110 a month. The $110 reduction allegedly would allow an estimated 3.4 million more households to qualify for a median-priced home, according to the National Association of Realtors.
But long-term costs paint a markedly different picture. A borrower on a 50-year mortgage can pay hundreds of thousands of dollars more in interest than a similar borrower on a 30-year loan.
For example, with a $400,000 loan amount, a 6.3 percent mortgage interest rate, and a 30-year note, the monthly payment would be $2,476, and the total cost would reach $891,321. Assuming the same $400,000 loan and a 6.8 percent mortgage interest rate, the monthly payment would be $2,346, and the total cost would reach $1,407,423. In the above scenario, the borrower would pay $130 per month less but would pay more than $500,000 in additional interest over the life of the loan.
Equity would also build more slowly. Some modeling suggests it could take around 30 years on a 50-year mortgage to reach equity milestones that a 30-year borrower might hit in about 12 to 13 years, and nearly 40 years to pay off half the loan. Considering the average first-time buyer is now roughly 40 years old (see below), that raises concerns about carrying mortgage debt well into older age. The loan might outlive the borrower.
Critics further note, rightly so, that longer loan terms do not fix the core problem: a shortage of homes, especially at lower price points, is what makes housing so expensive. Greater Boston and many parts of the United States need more housing. Easier financing may increase competition for the same limited inventory, keeping prices elevated.
If 50-year mortgages become a reality, consumers must compare total interest over 30, 40, and 50 years. Home buyers need to think realistically about the pitfalls of taking on such a lengthy loan.
Homeownership is still one of the most reliable ways for individuals and families to build long-term wealth, but a 50-year mortgage changes the calculation.
Are First-Time Home Buyers Really Getting Older Or Just Shut Out?
New data has intensified debate about who can afford to buy a first home in today’s market and at what age they do so.
A National Association of Realtors (NAR) survey of recent buyers finds that first-time buyers now make up just 21 percent of the market, a record low. It also reports that the typical first-time buyer is 40 years old, the highest age ever recorded. According to NAR, delaying homeownership from age 30 to 40 on a typical starter home can mean giving up roughly $150,000 in potential equity growth.
A separate look at credit report data from the New York Federal Reserve Bank Consumer Credit Panel (CCP), as reported by the American Enterprise Institute (AEI), tells a different story. Using a large, random sample of credit files, researchers found that, for purchases between the third quarter of 2024 and the second quarter of 2025, the average first-time buyer was about 36 years old, with a median age of 33. Those figures show minimal change compared with 2001 or 2021, according to the AEI reporting, suggesting that the dramatic jump to age 40 in the survey may not reflect the broader market. The AEI article argues that the CCP data is more comprehensive.
Both data sources agree that first-time buyers face a severe affordability crunch. From 2019 to 2024, the income needed for a typical first-time buyer to purchase a home rose 41 percent nationwide, nearly four times the 11 percent growth in median U.S. household income, according to the AEI article.
The Solution: The authors of the AEI article believe the federal government needs to make starter homes great again.
Prospective Home Buyers Filling Out More Mortgage Applications
The seasonally adjusted Mortgage Bankers Association Purchase Index for the week ending November 21, 2025, increased 8 percent from one week earlier. The unadjusted Purchase Index increased 2 percent compared with the previous week and was 20 percent higher than the same week one year ago.
For the week ending November 14, 2025, applications were 26 percent higher nationally than the same week in 2024. Purchase applications were 31 percent higher for the week ending November 7, 2025, compared to the previous year.