Housing affordability is so strained that Trump is considering a 50-year mortgage. Here are 11 things to know

Core Insights - The announcement by FHFA Director Bill Pulte indicates that Fannie Mae and Freddie Mac will remain in conservatorship, alleviating concerns about rising mortgage rates due to potential exits from conservatorship [3] - A new 50-year mortgage option is being considered to help improve housing affordability, with the government planning to sell up to 5% of shares back to the public [3] Mortgage Rate Implications - A 50-year mortgage is expected to carry a higher interest rate, estimated to be 42 to 57 basis points above the standard 30-year fixed mortgage rate [7][8] - The average 30-year fixed mortgage rate was reported at 6.22%, suggesting a potential 50-year mortgage rate between 6.64% and 6.79% [8] Monthly Payment Analysis - The primary advantage of a 50-year mortgage is lower monthly payments, with a $400,000 mortgage at 6.22% resulting in a monthly payment of approximately $2,455 for a 30-year term, compared to about $2,297 for a 50-year term, yielding a savings of roughly $158 per month [9][10] Long-term Financial Considerations - Borrowers using a 50-year mortgage would pay significantly more in total interest, with an estimated total interest payment of around $980,000 compared to $483,000 for a 30-year mortgage [14] - The slower pace of principal repayment in a 50-year mortgage means homeowners build equity much more slowly, with only about 9% of the balance paid off after 10 years compared to 20% for a 30-year mortgage [16] Market Demand and Public Sentiment - The introduction of a 50-year mortgage could create some additional housing demand, but it is unlikely to be substantial due to the current housing market conditions [19] - Early polling indicates that public sentiment towards the 50-year mortgage is largely unfavorable, which may hinder its implementation [20]