In a graphic posted to Truth Social on November 8, Donald Trump lists himself next to Franklin Delano Roosevelt as one of two “great presidents,” because FDR’s “New Deal” introduced the 30-year home mortgage and Trump, apparently, wants to “go large” on the idea. Federal Housing Finance Agency director Bill Pulte confirmed on X that “we are indeed working on The 50 year Mortgage — a complete game changer.”
The Trump/Pulte proposal brings up two questions: First, is a 50-year mortgage a good idea? Second, why on earth does the federal government set mortgage terms?
The answer to the first question is easy: Longer mortgage terms are terrible for people borrowing money to buy homes.
As the length of a mortgage increases, the monthly payment comes down a little but the total amount paid goes up a lot. Let’s take a simplified look at how things pan out for the same home, under current conditions, given different mortgage lengths.
The average US home price (as of May 2025) is $522,200. At the moment, the average interest rate on a 20-year mortgage is 6.12%; on a 30-year mortgage, 6.25%. I’m just guessing by linear extrapolation here that the interest rate on a 50-year mortgage would be about 6.5%.
On those terms, the monthly payment on a 20-year mortgage would come to $3,777.44 and the buyer would end up paying $906,586.57 total for that $522,200 home (this example doesn’t include the insurance, property taxes, etc. that get rolled into monthly mortgage payments as well).
At 30 years, the monthly payment would come down to $3,215.28, but the total paid would be $1,157,499.08 — more than twice the supposed price of the house!
And at 50 years? Your $2,943.73 monthly payment — only 23% less than the 20-year payment — would end up totaling $1,766, 237.75. Not only is that more than three times the supposed home price, but it’s nearly twice as much as you’d have paid on a 20-year term and about 35% more than you’d have paid on a 30-year term.
And by the way, mortgage payments are “front-loaded” toward paying interest at the beginning, so you don’t build significant equity in the home, by paying down principal, until the last few years of your mortgage term.
If you’re buying a home, the shorter the mortgage the better, even if you have to settle for a little less house to make the payment. Longer mortgages benefit the lender far more than the borrower.
As to why the federal government sets mortgage terms, well … about 70% of mortgages are “government-guaranteed” via Fannie Mae, Freddie Mac, the Federal Housing Administration, and other agencies.
That gives the federal government significant monopsony power. If you’re a lender, your home loans are “qualified mortgages” as defined by the market’s biggest “customer” and its bureaucratic rule-makers.
Not that adding 50-year-mortgages to the “qualified” and “guaranteed” basket would be an imposition. Banks love longer-term loans for the reasons explained above: They get more out of you versus what you get out of the deal.
Strange: It’s almost as if those government agencies work for the banks rather than for the borrowers.
Thomas L. Knapp (X: @thomaslknapp | Bluesky: @knappster.bsky.social | Mastodon: @knappster) is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism (thegarrisoncenter.org). He lives and works in north central Florida.
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