#197: The 50-year mortgage
Joshua and Amelie dive into the newly introduced 50-year mortgage option (as of 2025), exploring its potential benefits and drawbacks. They highlight the importance of understanding how any mortgage fits into an individual or family’s financial plan, and why consulting with a trusted financial advisor could help consumers evaluate whether this loan structure may make sense for them.
Topics Discussed:
- A brief history of mortgages and how they’ve evolved alongside the rising cost of building homes.
- The debate: Why discussions about the 50-year mortgage often exaggerate pros or cons depending on personal bias.
- Interest rate considerations:
- A 50-year mortgage is more appealing when rates are low.
- The interest rate difference compared to a 30-year mortgage is relatively small
- Monthly payments are lower than a 30-year mortgage. However, the reduction isn’t as significant as the jump from a 15-year to a 30-year loan.
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Refinancing potential: Moving to a 50-year mortgage could ease financial strain by freeing up cash flow
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Affordability myth: A 50-year mortgage doesn’t necessarily encourage buyers to purchase “too much house” any more than a 30-year loan would.
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Actual mortgage duration: Most homeowners don’t keep a mortgage for the full term—on average, loans last about 8 years before being refinanced or paid off.
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Fixed payments: Regardless of length, mortgages lock in principal + interest payments, even as inflation and income levels change.
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Total interest: Technically you’ll pay more total interest with a 50-year loan. However, the time value of money matters too—$10,000 in year 40 doesn’t feel the same as $10,000 in year 10 due to inflation and income growth.
- Cash flow impact: The interest rate has more of an impact on your current and future cash flow than the length of the mortgage.
- Housing market effects: In the short term, 50-year mortgages may affect home prices, but long-term supply -and-demand will likely play a bigger role.
