Fifty year mortgages? And how is that supposed to help?

I guess it would lower the monthly payment, similar to moving from a 15 year mortgage to 30 year. A 15 year monthly would be about $2,467 on a $300,000 loan, based on 5.6% interest. A 30 year at 6.48%, would be $1,892 per month.
 

It might make it possible for new home buyers to qualify for a loan, but at the same time, it may have the adverse effect of causing home prices overall to rise even more than they have already.

It will take years for owners to develop equity and resell that home, potentially entrapping them in it for a lifetime.

If home values fall over time, and they always have (sooner or later) homes will be worth less than the mortgage balance. This has happened even with 30 year mortgages - how much more so with 50 year mortgages.
 
IMO it’s just inflationary smoke and mirrors with little benefit.

It may be of some slight benefit to homebuyers that will trade up every few years or it may allow home sellers to squeeze out a slightly higher sale price.

For the average person, buying their forever home, I would encourage them to take a long term fixed rate mortgage and systematically make additional principal payments so it can be paid off in 10-15 years.
 
I think it will work with some of the 20 and 30 somethings. My 38 year old neighbor bought a $50,000 car a few years back on a long term loan. She makes less than $40,000 a year. All she cared about was the monthly payment. It’s about paid off and she wants to buy a new one when it is.

She wants a $350,000 house. With a 50 year loan, she could probably afford the monthly payments. That’s all that will matter to her.
 
I think the "experts" are overlooking a key factor. There are a lot of the younger generations that no longer feel the need for owning a home. Seems they prefer to rent. That and a lot of them know that soon, the Baby Boomer parents/grand parents will be passing on and they will be inheriting a home. As others have said, 50 year mortgage will help a banks bottom line... home owner... not so much.
 
@squatting dog …that is what I see too. In order for a mortgage to benefit the borrower there must be some equity being accrued. That equity needs to equal or exceed the costs incurred if the borrower needs to sell. In my area it costs 5-6% of the selling price to utilize a realtor. In a fifty year mortgage you would have to depend upon an escalating market. My market has been flat for about 3 years. In a flat market with a 300000 note at 6% it would take you 10 years to break even.
 
The banks are pretty much out of it after the loan is made.

Today the bulk of mortgage loans are bundled and sold on the secondary market in the form of mortgage backed securities similar to bonds.

By some estimates, more than half are handled by quasi governmental agencies like Freddie Mac and Fannie Mae.

The bulk of them most likely end up as part of the investments in our annuities, retirement funds, etc…
 
Lenders often sell mortgages to other companies to free up funds for them to offer more loans. That happened several times on my first home, but the home I'm in now was financed through Bank of America, who still holds the note.
 

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