There’s growing discussion in the real estate world about the potential introduction of the 50-year mortgage, and like most new ideas in housing finance, opinions are divided.
Let’s look at both sides.
The Case Against the 50-Year Mortgage
On paper, extending a loan to 50 years sounds like it could ease affordability challenges, lowering monthly payments and helping more buyers qualify.
But when you run the numbers, the savings are smaller than expected.
Take a $500,000 mortgage as an example:
- A 30-year fixed loan might cost around $3,000 per month (principal and interest).
- A 50-year mortgage could lower that to about $2,700 per month, a $300 monthly difference.
While that short-term relief may help some buyers qualify, it comes with a long-term cost, two extra decades of interest. Over the life of the loan, that could add up to hundreds of thousands of dollars in additional payments.
Another concern is the broader market effect. If longer terms make it easier for more buyers to qualify, demand increases, which could push home prices higher again. Ironically, what begins as an attempt to make housing more affordable could end up reducing affordability across the board.
The Other Side of the Argument
Here’s the opposing view: for some buyers, the 50-year mortgage might be less about paying for half a century and more about getting into the market now.
In Utah’s Wasatch and Summit County markets, rents continue to rise, and rent is, essentially, 100% interest. A fixed mortgage, even with a longer term, locks in your payment and allows you to start building equity.
The key idea behind the 50-year loan isn’t necessarily to carry it for 50 years. Instead, it’s to start with a lower payment and pay extra when you can, effectively shortening the loan while maintaining flexibility.
For buyers who are tired of watching home prices outpace their savings, this could be a strategy to enter homeownership and begin building long-term financial stability.
The Bottom Line
Whether the 50-year mortgage is a good idea depends on your financial goals:
- If your priority is to minimize interest paid, shorter terms are still best.
- If your priority is to enter the market sooner, a longer term could provide the breathing room you need, as long as you use it wisely.
As with all real estate decisions, there’s no one-size-fits-all answer. The best plan is the one that fits your budget, your timeline, and your goals.
If you’d like to see how a 50-year mortgage could impact your buying power in Utah’s market, let’s talk. I’m happy to run the numbers and help you make sense of the options available today.
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