A 50-year mortgage is 'only going to hurt the consumer.' Here are some ideas that could actually help.

By Aarthi Swaminathan

Experts call the idea of a 50-year mortgage, floated recently by President Donald Trump and FHFA Director Bill Pulte, 'very problematic'

A 50-year mortgage is the latest idea President Donald Trump and FHFA Director Bill Pulte have mentioned in regard to housing this year.

Would you swap your 30-year mortgage for a 50-year loan in order to lower your monthly payments?

Homeowners who are already decades into a mortgage might say no, as extending the duration of their loan would mean paying thousands of dollars more in interest. But others may find the option appealing, particularly if they're feeling pinched by the rising cost of groceries, healthcare and car insurance.

A 50-year mortgage is the latest idea floated by President Donald Trump and Federal Housing Finance Agency Director Bill Pulte this year to bring down the cost of housing. The two have also mentioned ending capital-gains taxes for home sellers, declaring a housing emergency and making most mortgages transferable between home sellers and buyers, a process known as mortgage assumption.

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

A financial product such as a 50-year mortgage could bring in more business for mortgage lenders and banks, but experts say it doesn't get at the core reason behind the housing crisis: a lack of supply.

Some of the ideas coming from the White House have merit, experts add, but others could open the door to predatory lending or result in taxpayers losing billions of dollars.

"President Trump is always exploring new ways to improve housing affordability for everyday Americans," a White House spokesperson told MarketWatch. "Any official policy changes will be announced by the White House."

Pulte and the FHFA did not respond to requests for comment.

The Trump administration's housing ideas are an attempt to address a long-brewing affordability crisis. The median age of the typical first-time buyer has jumped to 40, a record high, and one recent survey showed that people who postpone homeownership may also delay other major milestones such as getting married, having kids and changing jobs or careers.

Here are some of the ideas the administration has mentioned over the last 10 months.

A 50-year mortgage

The 50-year mortgage, floated this weekend by Trump and Pulte, already exists in countries such as Japan and Switzerland. The longest loan duration some U.S. mortgage lenders offer is 40 years.

For a loan that is spread out over 50 years rather than the usual 30, a borrower would have a lower monthly payment. A 50-year mortgage could also allow people to take on bigger loans for more expensive homes.

From the archives (July 2025): Why these homeowners say the 15-year mortgage is the most underrated offering in real estate right now

But a 50-year loan has numerous downsides, making it unpopular among some economists, mortgage brokers and policy experts.

It is "only going to hurt the consumer in the long run," as homeowners will build equity at a much slower pace than they would with a 30-year loan, David Dworkin, president and chief executive of the centrist National Housing Conference, told MarketWatch.

Five years into a loan, someone who bought a median-priced $400,000 house with 10% down would have accrued $17,000 less in equity with a 50-year mortgage than with a 30-year loan, he estimated.

Under federal guidelines, mortgages with such a long duration can also be considered predatory, Dworkin added. "The benefits of the longer term are far outweighed by the harm that it causes," he said.

It's unclear how a 50-year mortgage would be structured compared with a 30-year mortgage. But generally speaking, homeowners would likely pay far more in interest over the life of a 50-year loan.

A buyer choosing between 30-year and 50-year loans with an interest rate of 6.25% would hypothetically save $250 a month at most by choosing the latter, said Joel Berner, a senior economist at Realtor.com. But instead of paying about $438,000 in interest over the life of the 30-year loan, they would pay $816,000 in interest over 50 years - about 86% more.

(Realtor.com is operated by News Corp subsidiary Move Inc.; MarketWatch publisher Dow Jones is also a subsidiary of News Corp.)

A 50-year mortgage would likely also carry a higher interest rate to compensate lenders for the longer duration, Al Hensling, chief executive of United American Mortgage, told MarketWatch. Hensling said he's already gotten some calls from clients curious about a 50-year loan.

Because mortgage lenders would have to commit to a longer loan period, he said, they would require more in interest. And unlike with the 30-year mortgage, lenders are still uncertain about the risks associated with 50-year loans, Hensling added. For example, they may not be sure how long a homeowner might keep the mortgage before refinancing it.

"This is kind of uncharted territory," he added, calling the idea of a 50-year loan "very problematic" for its potential to cost the borrower more in interest. "I just don't believe it's a great idea."

Making mortgages assumable

Pulte this weekend also said that government-sponsored enterprises Fannie Mae and Freddie Mac are "evaluating how to do assumable or portable mortgages." Assumable mortgages allow a home seller to transfer their low-interest-rate loan to a buyer, while portable mortgages would allow people with low-interest-rate loans to transfer them to their next house.

This particular idea, while vague, was more warmly received by experts.

Fannie and Freddie each back one in four mortgages in the U.S., collectively overseeing half the overall mortgage market. Making these loans assumable is a "great idea," Dworkin said, as it could reduce the cost of buying a home and incentivize sellers to put their home on the market.

Government-backed mortgages such as Federal Housing Administration or Veterans Affairs loans are already assumable, but they account for a small fraction of the overall market.

Assumable mortgages were more common in the 1980s, before lending rules changed. If Fannie- and Freddie-backed loans were to be assumable, "that's going to change the whole pricing strategy here," Hensling said, as investors would not want to buy and hold such low-interest-rate loans when they could make more money with market-rate loans.

Realtor.com's Berner said expanding loan assumptions to mortgages backed by Fannie and Freddie could help ease the so-called lock-in effect, a term used to describe the reluctance of homeowners with ultralow mortgage rates to sell their homes.

More from the archives (October 2023): Why aren't homeowners selling their homes? Hint: It's not just the 'lock-in effect'

If homeowners with low rates can assume another 3% loan when they buy a new house, they may be more inclined to list their house and buy another, which frees up inventory. And that could bring down prices more.

Making mortgages portable is an even more intriguing idea to Dworkin. However, "it's a lot harder to execute," he said, and "no one has figured it out yet."

From the archives (October 2023): Want a 3% interest rate? 'Assumable mortgages,' a relic of the 1980s, are here to combat high rates.

Eliminating capital-gains tax on home sales

The Trump administration has also mentioned ending the capital-gains tax on home sales as a way to push more people to sell their homes.

Currently, individuals can exclude $250,000 of the profits on a home sale from capital-gains taxes, and married couples can exclude $500,000. These exclusion limits have not changed since 1997, when a typical home sold for $126,100. Today that is about $257,400, adjusted for inflation.

From the archives (July 2025): Homeowners in these states are the winners if Trump ends capital-gains taxes for home sellers

Nixing the capital-gains tax altogether would be an "incredible stimulus," Hensling said, as people would be more inclined to sell if they didn't face the prospect of a tax hit.

States where home prices are very high, such as California and New York, would benefit the most from such a policy, MarketWatch has reported, while states that don't have high home prices or that have not seen huge price growth may not benefit as much.

The White House did not respond to questions about whether it was still pursuing this idea.

Taking Fannie Mae and Freddie Mac public

The president has also floated the idea of taking Fannie and Freddie public, adding fuel to a long-running conversation.

In August, Trump posted an artificial-intelligence-generated image of himself presiding over a "MAGA-listed" New York Stock Exchange listing for a "Great American Mortgage Company" in November 2025.

The White House did not respond to questions about the timing of a potential initial public offering.

From the archives (June 2025): This move by Trump could be 'disastrous' for the mortgage market and drive up costs for home buyers even more

Complexities aside, the risk of getting a possible Fannie and Freddie IPO wrong is high, Dworkin said. If the two entities were to go public, would their boards become independent or remain under government conservatorship?

"If we do this badly, [homeowners' mortgage costs] will go up," Dworkin said. "But if we do it well, the taxpayer is going to get a return, and we'll actually raise money that could be used for affordable housing. And the companies will benefit."

Put another way: "If President Trump and Director Pulte do this the right way, they will have a historically positive impact on the housing-finance system. ... If they do it badly, the cost will be in the hundreds of billions of dollars."

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