How the math would work on a 50-year mortgage that Trump envisions

By Steve Goldstein

William Pulte, director of the Federal Housing Finance Agency, said the White House is studying the introduction of a 50-year mortgage.

President Donald Trump and the head of a key housing agency over the weekend mused about a 50-year mortgage backed by the government. The key question, beyond the logistics of actually introducing such a product, is how much of a benefit there would be in terms of affordability.

Using Fannie Mae's calculator, the average monthly payment on a 30-year mortgage at a 6.2% rate with 20% down on the median existing-home sale price of $415,200 would be $2,813, including $2,034 on principal and interest. That falls to $2,577, or $1,798 in principal and interest, on a 50-year mortgage.

Granted, interest rates would not be the same. Right now there is no 50-year Treasury to help price such a mortgage, but it's useful to think of one given a mortgage is usually priced about 1 to 1.25 percentage points above government debt.

A San Francisco Fed paper published in 2021 estimated that the 50-year Treasury yield would be higher than the 30-year, but not by much, about 20 basis points. Ben Emons of Fed Watch Advisors calculated similarly, that using Treasury forwards, the yield on a 50-year Treasury right now be around 5%, vs. the 4.73% the 30-year yields BX:TMUBMUSD30Y.

Other countries do have 50-year bonds, including the U.K. and France. Interestingly, the U.K. 50-year yield BX:TMBMKGB-50Y is about 50 basis points lower than its 30-year BX:TMBMKGB-30Y; the French 50-year BX:TMBMKFR-50Y is about 20 basis points lower. That's reflective of demand for these products from pension funds and insurers trying to match maturities.

Wall Street has mused about the idea, too. In 2017, the Treasury Borrowing Advisory Committee said while it didn't see evidence yet of strong or sustainable demand for ultra-long dated securities, it could be warranted to boost the Treasury's capacity to borrow. The advisory committee said 50-year issuance would make more sense than 100-year, given there aren't many insurer or pension fund cash flows that stretch that long.

Beyond affordability, though, a 50-year mortgage would change the structure of the product, from one paid off during the course of a working career to one that wouldn't be paid off until, well, death, given the average age of a first-time buyer in the U.S. is 40.

The idea behind the 50-year would be to get younger buyers on the ladder, but it probably couldn't move the demographics that much.

Buyers of a 50-year product would gain equity, but at a very slow rate. Using $412,200 at 6.2% again, it would take over 20 years to pay off the first $50,000 on a 50-year mortgage, versus about eight on a 30-year.

-Steve Goldstein

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11-10-25 0711ET