In early November 2025, President Donald Trump used his Truth Social platform to hint at a new 50-year mortgage plan. The Federal Housing Finance Agency director, Bill Pulte, confirmed that they were working on this “complete game changer.”
The goal may be to make homes more affordable by reducing mortgage payments. Given that the median monthly payment is now $2,039, they can be difficult to swing. But many money experts, including George Kamel, think they’re not a good idea. In a recent YouTube video, he explained why they could be bad for your money.
1. It Doesn’t Reduce the Cost of a Home
When you do the math, a 50-year mortgage doesn’t bring down your monthly payment by that much. Using a half percentage-point difference between loan terms, here’s how the math would break down for a $400,000 loan:
- 15 years at 6% interest: $3,375.43 per month
- 30 years at 6.5% interest: $2,528.27 per month
- 50 years at 7% interest: $2,406.75 per month
You’d end up paying only $128 less per month with a 0.5% interest jump, and the increase might be even higher.
Find Out: How Much House Does $300K, $400K and $500K Buy You in Every State?
Read Next: How Middle-Class Earners Are Quietly Becoming Millionaires — and How You Can, Too
2. It’s an ‘Interest Trap’
As Kamel explained, lenders charge more for longer-term mortgages because they represent a higher risk. Each additional year of repayment is another chance for the buyer to default, and lenders offset that risk with higher rates.
A longer term also gives interest more time to accrue, resulting in a higher loan cost. Someone borrowing $400,000 over 30 years at 6.5% would pay $510,178 in interest. Someone paying the same amount over 50 years at 7% would accrue more than $1.04 million in interest — almost twice as much, and 2 1/2 times the loan principal.
3. It Turns Homeownership Into Generational Debt
According to the National Association of Realtors®, or NAR, the average age of a first-time homebuyer has reached a historic high of 40. The average American life expectancy is 78.4 years, so statistically, a buyer’s mortgage is likely to outlive them.
4. You ‘Barely Build Equity’
A key financial benefit of buying a house is that you build up equity as you pay off your mortgage. But, as Kamel explained, a 50-year mortgage will “basically wipe out” that advantage.
In the first year of a 50-year mortgage, assuming you borrow $400,000 at 7%, almost 97% of your mortgage payments go toward interest. By year 10, that amount is still close to 94%. With that much interest, you don’t pay off half your initial principal until you’ve had the mortgage for 40 years.
If you took out your mortgage at age 40, you don’t accrue half the equity in your home until you’re 80. You don’t even have $100,000 in equity until you’re 72.
Plus, NAR data shows that homeowners sell after an average of 11 years. At that point, you’d have less than $15,000 in equity. That’s not even enough to put down 10% on a median-priced home, now $415,200.
Realtor fees and closing costs mean you’d walk away with even less — perhaps even nothing. “In practical terms, with a 50-year loan, you’re just renting from the bank instead of a landlord,” Kamel said. “Except this time, you’re on the hook for replacing that roof.”
5. It Only Benefits Builders, Banks and Investors
So far, there’s no evidence that a 50-year mortgage benefits consumers, but companies stand to gain significantly. Kamel believes that if consumers qualify to borrow more, given the longer available term, sellers and builders could raise prices to take advantage.
Meanwhile, banks can earn interest for longer periods. They own a majority stake in the property for most of the loan term. That’s a major business advantage for banks and their investors, who could buy more mortgage-backed securities — packages of mortgage debt that banks sell to raise capital.
As Kamel put it, “You think you’re buying a home, but what you’re really buying is 50 years of cash flow for someone else to fund their dreams.”
Kamel is far from the only person who has taken this stance. Potential homebuyers must be cautious and think carefully before participating in this program should it become a reality.
More From GOBankingRates
- Trump's $2K Dividend: Who Qualifies and How You'll Get It
- 5 Best Spring Items To Buy at Sam's Club Before They Sell Out
- How Middle-Class Earners Are Quietly Becoming Millionaires -- and How You Can, Too
- 5 Things You Must Do When Your Savings Reach $50,000
This article originally appeared on GOBankingRates.com: George Kamel: 5 Reasons a 50-Year Mortgage Is Bad for Your Money
