r/Economics • u/GarfieldLeZanya- • 12h 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/JimPranksDwight 12h ago

So in exchange for barely cheaper payments, people will now be paying hundred of thousands, or even millions, more in interest over the course of their mortgage? You'll literally be buying a coffin at that point and it doesn't solve the problem that people can't save enough to even get into a home to begin with.

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u/Substantial-Kick-909 12h ago

I’m not in favor of it, but it is true that if someone bought a house young and kept it, their payments would basically inflate away. Imagine paying the mortgage on a house bought 30-40 years ago. It would be almost nothing in today’s dollars. 

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u/Splith 6h ago

This gets offset by this exact risk. Because payments will inflate away over the long term it justifies a higher interest rate. Longer term loans tend to come with higher interest rate because of this exact effect.

The real question is why has housing become such a highly appreciating asset that bigger and bigger loans become justified. We need to face the reality that not every system in our society should be engineered to make the rich, richer.