Whats wrong with a 50 year mortgage?

[Anonymous]

It doesn't save much money, in the end.

[Anonymous]

The underlying problem is that we have not built enough new housing stock for years. Assuming overall affordability is the goal, this mortgage hack is not going to fix that.

Also its not going to make as big a difference in monthly affordability as the PP's calculations assume. Just like the 30 year mortage rate is > a 15 year, a 50 year rate will be even higher than the 30.

And, even assuming banks and consumers adopt this at scale (a big assumption, imo), that would juice demand without increasing supply, resulting in even higher home prices.

I'd focus on reducing barriers/increasing incentives to build affordable housing stock.

--signed, an economist

[Anonymous]

Anonymous wrote:The underlying problem is that we have not built enough new housing stock for years. Assuming overall affordability is the goal, this mortgage hack is not going to fix that.

Also its not going to make as big a difference in monthly affordability as the PP's calculations assume. Just like the 30 year mortage rate is > a 15 year, a 50 year rate will be even higher than the 30.

And, even assuming banks and consumers adopt this at scale (a big assumption, imo), that would juice demand without increasing supply, resulting in even higher home prices.

I'd focus on reducing barriers/increasing incentives to build affordable housing stock.

--signed, an economist

Converting the mortgage interest deduction to a refundable tax credit (with an income cap) would go a long way to helping affordability and benefit first-time homebuyers.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The underlying problem is that we have not built enough new housing stock for years. Assuming overall affordability is the goal, this mortgage hack is not going to fix that.

Also its not going to make as big a difference in monthly affordability as the PP's calculations assume. Just like the 30 year mortage rate is > a 15 year, a 50 year rate will be even higher than the 30.

And, even assuming banks and consumers adopt this at scale (a big assumption, imo), that would juice demand without increasing supply, resulting in even higher home prices.

I'd focus on reducing barriers/increasing incentives to build affordable housing stock.

--signed, an economist

Converting the mortgage interest deduction to a refundable tax credit (with an income cap) would go a long way to helping affordability and benefit first-time homebuyers.

Not without increasing supply. Address that first, then play games with payment affordability (if you still need them).

[Anonymous]

Anonymous wrote:Why not a 100-year loan? Or how about a 1000-year loan?

They do 1000 year bonds in corporate bonds
Corporations The Canadian Pacific Corporation (a railroad company) issued a 1,000-year bond in the past. Other historical railroad bonds with very long maturities were also issued in the late 19th century.
Banks In 1997, the Safra Republic Bank prepared to issue the first-ever 1,000-year bond.
Energy Companies A Danish energy company issued a bond with a 1,000-year maturity in 2017.

[Anonymous]

Anonymous wrote:It's fine when values are rising. Not so much if property values decline. Then you're F'd, the bank if F'd, and the nation who has to bail out the loan is F'd.

Yes, this is a great point. Brith rates are below replacement level almost everywhere in the world now. I think future property appreciation is not a safe assumption when population growth is negative.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The underlying problem is that we have not built enough new housing stock for years. Assuming overall affordability is the goal, this mortgage hack is not going to fix that.

Also its not going to make as big a difference in monthly affordability as the PP's calculations assume. Just like the 30 year mortage rate is > a 15 year, a 50 year rate will be even higher than the 30.

And, even assuming banks and consumers adopt this at scale (a big assumption, imo), that would juice demand without increasing supply, resulting in even higher home prices.

I'd focus on reducing barriers/increasing incentives to build affordable housing stock.

--signed, an economist

Converting the mortgage interest deduction to a refundable tax credit (with an income cap) would go a long way to helping affordability and benefit first-time homebuyers.

Not without increasing supply. Address that first, then play games with payment affordability (if you still need them).

We don’t need to increase supply that much us population will start to decline within 30 years with the current immigration restrictions and deportations.

[Anonymous]

There will be a lot more houses coming on the market through estate sales in the next few years of the baby boomer generation.

[Anonymous]

If a 30 year mortgage is better than a 15 year mortgage, then maybe a 50 year mortgage is better than a 30 year mortgage.

No way in hell would I opt for a 15 year mortgage. Much better to invest the extra cash.

[Anonymous]

It's basically another version of renting.

Look at interest cost over the life of the loan.

[Anonymous]

Anonymous wrote:

Anonymous wrote:
You don’t build any equity. If you’re cool with an interest-only mortgage then good for you.


And home ownership had been a way for people with middle class incomes to build wealth. Can't have that.

It will mean that the government is on the hook for paying more in Medicaid for nursing home care because nobody has their house as a piggy bank anymore. The average net worth of a person will fall dramatically. But yes, banks will win big.

LOL! The same government proposing the 50 yr mortgage loans sure won’t be helping anyone out through Medicare.

[Anonymous]

Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
The underlying problem is that we have not built enough new housing stock for years. Assuming overall affordability is the goal, this mortgage hack is not going to fix that.

Also its not going to make as big a difference in monthly affordability as the PP's calculations assume. Just like the 30 year mortage rate is > a 15 year, a 50 year rate will be even higher than the 30.

And, even assuming banks and consumers adopt this at scale (a big assumption, imo), that would juice demand without increasing supply, resulting in even higher home prices.

I'd focus on reducing barriers/increasing incentives to build affordable housing stock.

--signed, an economist


Converting the mortgage interest deduction to a refundable tax credit (with an income cap) would go a long way to helping affordability and benefit first-time homebuyers.


Not without increasing supply. Address that first, then play games with payment affordability (if you still need them).


We don’t need to increase supply that much us population will start to decline within 30 years with the current immigration restrictions and deportations.

Those immigration restrictions could change quickly. Same for deportations. Do you think they are going to let GDP fall?

[Anonymous]

Can I have a 10,000 year mortgage? That would really make my payment low!

[Anonymous]

If you are asking this because you think it's a good deal for you to afford a house...well the question indicates economic naivete that may be indicative or the cause of your financial situation. Go ask Gemini or ChatGPT for a summary of pros and cons.

[Anonymous]

All of the downsides of owning with the same upside as renting.