In early November 2025, President Donald Trump used his Truth Social platform to hint at a new 50-year mortgage plan. The Federal Housing Finance Agency director, Bill Pulte, confirmed that they were working on this “complete game changer.” The goal may be to make homes more affordable by reducing mortgage payments. Given that the median monthly payment is now $2,039, they can be difficult to swing. But many money experts, including George Kamel, think they’re not a good idea. In a recent YouTube video, h ...

Core Viewpoint - The debate between "paying in full" and "30-year mortgage" continues, impacting the quality of life and wealth planning for ordinary families [1] Economic Costs - The main advantage of paying in full is "zero interest," with a 1 million yuan loan at a 3.5% annual interest rate resulting in approximately 610,000 yuan in interest over 30 years, increasing total costs by 60% [2] - Full payment buyers often receive discounts of 2%-5% from developers, with some second-hand sellers lowering prices, such as a 500 million yuan property saving 100,000 yuan with a 2% discount [2] - Mortgage buyers can use "time leverage" to hedge against inflation, as the real burden of monthly payments decreases over time, especially if remaining funds are invested in products yielding 5% annually [4] - However, in an amortized repayment model, over 60% of payments in the first 10 years are interest, highlighting the "interest trap" [4] Liquidity of Funds - Full payment buyers lock significant funds into real estate, facing liquidity risks if emergencies arise, as seen in a case where a homeowner had to sell at a 15% discount and still couldn't sell after six months [5] - Mortgage buyers retain more emergency funds; for instance, a 30% down payment on a 500 million yuan property requires only 150 million yuan upfront, leaving 350 million yuan for investment or savings [5] - If this remaining amount is invested in stable products yielding 4%, it can cover part of the monthly mortgage, but investment failures or income interruptions pose risks, with a 2.3 percentage point increase in mortgage default rates among buyers under 30 since five years ago [5] Psychological Pressure - Full payment buyers report stronger feelings of security, with some indicating improved sleep quality due to the absence of debt [6] - However, this security may come with opportunity costs, as a decline in property value can lead to greater asset depreciation for full payment buyers [6] - Mortgage buyers experience ongoing pressure, with some reporting that monthly payments consume 60% of their income, affecting their lifestyle choices [6] - A bank survey indicates that after five years of repayment, 76% of mortgage holders feel their financial pressure is manageable [6] Decision-Making Recommendations - Experts suggest that buyers should consider three factors: 1. Financial reserves: If liquid assets cover full payment with over six months of emergency funds, full payment may be viable; otherwise, a mortgage is safer [7] 2. Investment capability: If stable returns exceed the loan interest rate (e.g., over 4%), a mortgage can enhance wealth; otherwise, full payment is more advantageous [9] 3. Risk tolerance: Conservative families may prefer full payment to avoid uncertainty, while aggressive families might use mortgages to expand asset size [9] Current Policy Environment - The policy landscape is also crucial, with first-time home loan rates dropping to 3.15% in 2025 and increased public housing loan limits, easing mortgage access [8] - However, the real estate market is becoming more polarized, with declining liquidity in some third and fourth-tier cities, increasing depreciation risks for full payment buyers [8] - Ultimately, neither payment method is inherently superior; the choice depends on individual circumstances, emphasizing the need for long-term financial health over short-term temptations [8]