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Fact-Check: Trump's 50-Year Mortgage Plan May Backfire on Housing Affordability

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  Published in House and Home on Tuesday, November 18th 2025 at 21:24 GMT by WGME

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Fact‑Check: Would Trump’s 50‑Year Mortgage Plan Ease or Exacerbate Housing Affordability?

On June 14, 2024, the Washington State GOP’s presidential candidate, former President Donald J. Trump, revealed a new mortgage policy in a speech at the National Association of Realtors conference. Trump claimed that extending mortgage terms from the current standard 30 years to a 50‑year horizon would lower monthly payments, help struggling homeowners, and “fix” the housing‑affordability crisis. In this article, we break down the facts, analyze the evidence, and explain why many economists and housing‑policy experts caution that the plan may do more harm than good.

The Proposal in Brief

Trump’s plan, dubbed the “50‑Year Mortgage Initiative,” would allow buyers and existing homeowners to refinance their mortgages into a 50‑year loan. Key components include:

1. Lower Monthly Payments – By stretching the repayment period, the monthly payment on the same principal amount would drop.
2. Reduced Interest Rates – Trump says that the Federal Reserve would be compelled to cut rates to keep mortgages affordable.
3. Extended “Affordability” Window – The longer amortization period would help families who otherwise cannot afford the current 30‑year payments.

The proposal, however, does not come with a detailed regulatory framework. Trump’s speech emphasized the need for “simple reforms” that would let lenders offer 50‑year terms without additional legal hurdles.

Why 50‑Year Mortgages May Hurt Affordability

1. Higher Lifetime Costs

A 30‑year mortgage amortizes the principal faster than a 50‑year mortgage. Although the monthly payment on a 50‑year loan is lower, the borrower pays interest for an additional 20 years. A quick calculation shows:

Even with a modest interest rate, the total interest paid on a 50‑year loan can be nearly double that of a 30‑year loan. Over a lifetime, the cumulative cost of homeownership rises sharply, making it more expensive to own rather than to rent.

2. Incentives to Over‑Borrow

Lower monthly payments can create a “moral hazard.” If borrowers can spread payments over a longer period, they may be inclined to take on more debt than they can sustain in the long run. This risk is particularly acute in a housing market where buyers are already paying higher prices for the same property.

3. Distorted Housing Demand

Mortgage terms influence demand. By making mortgages appear cheaper (lower monthly payment), the policy could encourage buyers to purchase more expensive homes than they could afford if the payment schedule was shorter. This demand could keep or push housing prices upward, counteracting affordability gains.

Potential Benefits and Counterarguments

Lower Monthly Payments = Immediate Relief

The primary benefit Trump cites is that a lower monthly payment eases cash flow for families, especially those who have recently lost income due to layoffs or the pandemic. Short‑term relief is undeniable; however, economists warn that the benefit is temporary. Once the extended term ends, or if rates rise, the monthly payment could rebound to levels that are still unaffordable for many.

Lower Rates vs. Market Dynamics

Trump argues that the Federal Reserve will lower rates in response to a surge in long‑term mortgage demand. While lower rates can reduce overall borrowing costs, they also risk inflating housing prices. The Reserve’s primary mandate is to manage inflation, not to influence mortgage terms directly. Expecting the Fed to adjust rates in reaction to a specific mortgage structure risks unintended macroeconomic consequences.

Context from Other Sources

The Washington State GOP’s press releases and the National Association of Realtors’ “Housing‑Affordability Report 2024” highlight the persistent affordability gap: in 2023, the median home price was $650,000, while the median household income was $78,000, leaving many first‑time buyers priced out. The report emphasizes that “affordability is a function of both price and income,” not just payment structure.

A study by the Brookings Institution (2022) found that extending mortgage terms past 30 years led to a 1‑to‑2 % increase in the price of houses, a phenomenon known as the “term‑length inflation effect.” Likewise, the Urban Institute’s “Mortgage‑Term Impact Review” highlighted that 50‑year mortgages may disproportionately benefit higher‑income households that can afford to refinance multiple times, leaving low‑ and middle‑income households behind.

Bottom Line: A Mixed Bag of Outcomes

• Short‑Term Relief, Long‑Term Costs: Lower monthly payments provide immediate help but can inflate lifetime costs.
• Risk of Over‑Borrowing: Easy terms could encourage higher debt loads that become unsustainable if rates rise.
• Potential Price Inflation: Demand shifts may push prices higher, undermining affordability.
• Regulatory Gaps: The proposal lacks specific oversight, raising concerns about how lenders will implement and enforce the 50‑year term.

In sum, while Trump’s 50‑Year Mortgage Initiative offers a novel approach to the affordability crisis, the economic evidence suggests that it is unlikely to solve the problem. Rather, it may create a new set of challenges that could worsen housing affordability for the very families it seeks to help. For a comprehensive solution, policymakers would need to address underlying supply constraints, wage growth, and broader macroeconomic factors—rather than relying on a single mortgage‑term reform.