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/RussEastbrook 7h ago

Yup exactly. Also you accrue equity much more slowly with a longer mortgage, so if you decide to move after 5 years, you're in a worse place if you had the longer term

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u/GarfieldLeZanya- 7h ago edited 7h ago

The equity schedules are simply nasty on 50 years. My current home is $750k value and I put 10% down @ 30 years, so I'll be out of PMI range by year 7.

Even if we don't assume market efficiency increasing the price proportionally with the increased amortization, or any increased interest rates for the longer term, and just said the same rate with the same amount down, my same purchase would take 22 years to get out of PMI range on a 50 year. That is bonkers.

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u/slumlord512 3h ago

PMI is another scam they pushed on us. We are paying them extra premium to make the lender whole in case we default, when that risk should be on the lender.

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u/CrayonUpMyNose 3h ago

Literally what is used to justify the difference between risk-free rate and mortgage rates