Super great … if you are a BANK.

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

Anonymous wrote:I mean lower monthly costs, you still can refinance or pre pay.

But if job loss or starting out lowers payments nice.

Back when we had 2.75 percent mortgages locking in 50 years would be great!

There’s nothing wrong with it if you’re the financial institution.

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.

It's basically renting a place.

These kinds of loans have been the norm in other countries for a while.

Japan, UK, Sweden.

The pro: Lowers housing payments.

The con: Severely slows equity accumulation. More interest paid overall.

Anonymous wrote:I mean lower monthly costs, you still can refinance or pre pay.

But if job loss or starting out lowers payments nice.

Back when we had 2.75 percent mortgages locking in 50 years would be great!

Are people really this financially illiterate? No wonder we have a debt problem.

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

This. You will be OUTBID by someone who also can afford the 50-year payment or someone who has access to 100-year loan.

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

Overextension. You get a lower monthly rate in order to buy a home you shouldn't buy in the first place. 30 fixed is the norm.

First, we could all be at 2.75 or lower rates if we paid down the national debt.
Second, retirement age occurs before the mortgage would be paid.
Third, it’s high risk. Mortgage companies aren’t willing to do it.
So, it’s a non starter

If you take out a 50 year loan at 4% for 320k, you end up paying $420k in interest.
For 20 year, it would only be $120k in interest.
If you take out a 20 year loan at 3% for $650k, interest would be $215k. That increases to $605k in interest for 50 years.
Most people don’t want pay that much just in interest.

you pay interest only for 20 years? that sounds terrible

It's a cost issue. There is very little monthly savings, likely a higher interest rate, significantly higher total interest and virtually no possibility of paying it off before retirement unless you prepay. I mean, for that, why bother to buy?

I mean lower monthly costs, you still can refinance or pre pay.

But if job loss or starting out lowers payments nice.

Back when we had 2.75 percent mortgages locking in 50 years would be great!