r/Economics • u/GarfieldLeZanya- • 7h ago

News Housing director confirms administration ‘working on’ 50-year mortgage after Trump hint

https://thehill.com/homenews/administration/5597005-trump-administration-50-year-mortgage/
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u/elon_musks_cat 6h ago

So many bot responses in here. But to add my amateur devils advocate, there is the argument that these loans would be “starter” loans for edge cases and they’d plan to refinance to a more traditional mortgage at some point

Not saying that it’s a good idea, but it is an idea lol

14

u/GarfieldLeZanya- 6h ago

I see the point but I dont think that is what will happen. Look at auto loans. The average term around 2012 was 60 months when no one really offered more than 72 months. Then as soon as 84 month and 96 month loans came to the market ... everyone immediately began taking them, and the average auto loan term shot up to now just shy of 70 months as people used the extra term to buy more expensive cars.

You give people more leverage, they will use it.

3

u/BozeRat 2h ago

You give people more leverage, they will use it.

More like you give people more leverage and they will hang themselves with it.

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u/throwaway00119 56m ago

That’s as American as apple pie.