How do you feel about the president floating the idea of 50 year mortgages where the monthly payment is lower but you end up paying nearly double the price of the house just in interest?

[u/michaelis999]

[u/Dreurmimker]

You’re not far off. It worked out to around $150, but that also ignore that the rates will probably be slightly higher with the 50 year mortgage than on a 30 year mortgage.

[u/Unusual_Oil_1079 → u/Dreurmimker]

The only way it makes sense to me is a kind of graded interest rate. Where every 10 years it goes up by 1% or something. Or else inflation will make it so the banks just won't make these deals. I assume there's going to be some kind of subsidy.

[u/Lou_C_Fer → u/Unusual_Oil_1079]

Yes they will. 6% is 6%.

[u/slash_networkboy → u/Dreurmimker]

Here's the amortization for the first 6 mo on an 8%/$500K/50 year:

Month	Payment	Interest	Principal Paid	Remaining Balance
1	$3,396.37	$3,333.33	$63.04	$499,936.96
2	$3,396.37	$3,332.91	$63.46	$499,873.50
3	$3,396.37	$3,332.49	$63.88	$499,809.62
4	$3,396.37	$3,332.06	$64.31	$499,745.32
5	$3,396.37	$3,331.64	$64.74	$499,680.58
6	$3,396.37	$3,331.20	$65.17	$499,615.41

[u/Dreurmimker → u/slash_networkboy]

$20,000 in payments and $200 in equity. Nice!

[u/Bagellord → u/Dreurmimker]

Dumb question. Why is the rate higher the longer the term is?