Is a 50-Year Mortgage Just Renting From the Bank?

You’ve probably already seen the headlines: “The new 50-year mortgage could make housing more affordable!”

Sounds great, right? Until you actually do the math. And guess what…the math is not mathing. It is a “slightly” cheaper payment but trust me when I tell you it’s a much much bigger problem. 

Here’s the idea: stretch your mortgage out over 50 years, and your monthly payment goes down. Simple. Attractive. Supposedly the answer to affordability.

Except it’s not. Because that lower monthly payment comes with a massive price tag, and not the good kind. You’re basically signing up to be a lifetime tenant, just paying the bank instead of a landlord and fixing your own roof along the way.

Let’s say you’re buying a $500,000 house. You put 20% down, so you’re borrowing $400,000 at a 6% rate. (not including taxes and insurance) 

According to my mortgage calculator the payments would be: 

30-year loan: about $2,398 per month50-year loan: about $2,106 per month

That’s a $292 difference, which doesn’t sound terrible. But stretch that out 20 more years and here’s what happens:

30-year total: $863,28050-year total: $1,263,600

That’s $400,000+ more for the same house. That’s almost half a million dollars just so your payment can seem more “manageable”. I promise you you can save less than 300/month somewhere else. 

But the real issue is the equity. Or I should say, the fact that you will have none. On a 50-year loan, you’re barely touching the principal for a decade. So when you go to sell in 10 years, you’ll have very little equity built.

That makes it harder to move up, harder to refinance, and harder to build real wealth. It’s the hamster wheel of homeownership, paying forever but never really getting ahead.

And let’s be real, if you’re 40 when you buy, you’ll make your last payment at 90. That’s not a financial plan, that’s a lifetime of payments. 

Plus, If prices dip, you could even owe more than the home is worth. Then we see a repeat of the housing recession all over again. 

It’s the illusion of affordability: smaller payments now, way bigger costs later. The only one who wins is the bank. They get five decades of steady interest while you handle all the repairs, insurance, and taxes.

Homeownership is supposed to build stability, freedom, and long-term wealth.But with a 50-year loan, you’re just maintaining someone else’s asset. You pay all the costs of ownership but never actually own much of anything.

This kind of policy doesn’t close the wealth gap. It widens it.Those with money buy shorter terms or pay cash. Everyone else gets stretched thinner, tied to debt that might outlive them.

And when budgets are maxed out, repairs get skipped, homes deteriorate, and neighborhoods lose value, it’s now impacted entire communities. 

If affordability is the issue, there are smarter moves than a 50-year loan:

• Buy a smaller house or in a different area. Nobody wants to be house-poor. You don’t need to stretch yourself so thin just for the bigger home.

• Shop hard for the best rate. Even a half percent can save more than 20 extra years will.

• Look into programs that can help build equity quickly- buy a home that needs improvements and utilize grant money for said improvements. (think NFC or Invest DSM)

• Work with a lender who will explain the math, not just the payment. You want someone to give you a holistic view of everything.

If someone is pitching you a 50-year mortgage as “the answer,” they’re not selling you a home. They’re selling you debt. I am hopeful this does not get approved and if it does I sincerely hope buyers are educated on what they are signing up for.