Trump’s 50-year mortgage would save you about $119 a month while doubling the interest you pay over the long run, UBS estimates

Core Insights - The Trump administration's proposal for a 50-year mortgage aims to enhance housing affordability but may lead to significantly higher interest payments over the loan's life [1][3][5] Mortgage Analysis - A UBS analysis indicates that extending the mortgage term from 30 to 50 years could lower monthly payments on a median-priced home by approximately $119, but would double the total interest paid over the loan's duration [2][3][5] - The average borrower could incur an additional $389,000 in interest over the life of a 50-year mortgage compared to a 30-year mortgage [5] Financial Implications - For a median-priced home valued at $420,000, a 12% down payment would result in a loan amount of $369,600, with a standard 30-year mortgage at a 6.33% interest rate leading to a monthly payment of $2,295 [6] - The proposed 50-year mortgage would have a higher interest rate of 6.83%, but would reduce the monthly payment to $2,176, increasing the average consumer's buying power by nearly $23,000 [7] Structural Challenges - The viability of the 50-year mortgage is complicated by the current conservatorship of Fannie Mae and Freddie Mac, which may affect the purchase and securitization of these longer-term loans [8] - Amending the Dodd-Frank Act to classify 50-year mortgages as qualifying loans may be challenging, potentially resulting in higher interest rates compared to 30-year loans [8] Housing Market Conditions - The housing market is experiencing significant inefficiencies, with affordability at its lowest since the mid-1980s and a structural shortage of 7 million homes in the U.S. [10] - UBS suggests that direct government investment in housing infrastructure, particularly through the use of manufactured wall panels, could be a viable solution to improve housing conditions [9][11] Political Reception - President Trump has downplayed the significance of the 50-year mortgage proposal, indicating it may not be a priority amid concerns from his voter base [12]