President Donald Trump recently floated a proposal to introduce 50-year mortgages, a move aimed at helping more first-time homebuyers enter a housing market that has been increasingly out of reach.
For years, younger generations have sounded the alarm about affordability. The average U.S. home price keeps climbing, and many millennials and Gen Z buyers can’t scrape together enough savings for a 10% down payment, much less qualify for the resulting monthly payments.
At today’s prices, a $500,000 home at a 6% interest rate over 30 years would cost roughly $3,320 per month (including taxes and insurance). For most households, that’s more than a third of their income, which is the upper limit of what mortgage lenders typically approve.
A 50-year mortgage would cut that payment to around $2,990 per month, freeing up about $330 every month, or roughly $4,000 per year. That may not sound life-changing on paper, but for most Americans, that’s a grocery bill, utilities, or even a car payment. It’s the kind of breathing room that changes how people live.
Yet the idea has faced heavy criticism, with detractors calling it a form of “debt slavery” that locks people into lifetime payments. But this argument misunderstands what long-term, low-interest debt really is. Debt isn’t inherently bad; it’s a tool. Used correctly, it can be one of the most powerful wealth-building mechanisms available.
Let’s put real numbers to it.
If you buy a $500,000 house with 10% down ($50,000) and a 6% interest rate, your monthly payment (including property taxes and insurance) would be about $2,993.82 on a 50-year mortgage.
Meanwhile, Dallas – one of the country’s hottest housing markets – has averaged 9.28% annual appreciation over the past decade, and certain neighborhoods have seen up to 14% yearly growth.
That means, on average, your $500,000 home increases in value by $46,400 per year.
Your annual cost (mortgage, taxes, insurance) totals $35,925.84 per year.
So even without factoring in equity gains from your payments, you’re up $10,474 per year on paper — purely from appreciation outpacing your cost to own.
If you put $100,000 down (20%), that’s a 10.5% annual return on your cash investment. And if you put $50,000 down, that doubles to roughly 21% – and not from speculation, but simply from ownership of appreciating real estate financed with long-term fixed debt.
One word: Leverage.
The 50-year mortgage lets you control a $500,000 asset for a fraction of the cost and hold it long enough to let appreciation compound. Real estate historically appreciates by 3%-4% annually nationwide, but in high-growth markets, it can easily double or triple that.
Sources: U.S. Census Bureau; U.S. Department of Housing and Urban Development via FRED®
Even modest appreciation adds up over decades. Unlike short-term speculation, this is about locking in your costs and letting time and inflation work in your favor.
Inflation erodes the real value of your debt. Every year, your $2,993.82 payment becomes cheaper in “real dollars” as wages and prices rise, but your mortgage doesn’t. That’s the magic of fixed-rate debt.
In 2000, the average U.S. rent was about $600/month, according to iPropertyManagement. Today, it’s $1,650. That’s nearly tripled in 25 years.
If you had taken out a 50-year mortgage in 2000 at $700 per month, you’d still be paying that same amount today. Your payment would be frozen while rents and inflation marched upward. Over decades, that kind of price lock is priceless. And your house is now probably worth more than the principal and interest paid during that time, too.
Plus, every month of ownership builds equity. Even if appreciation slowed, you’d still be paying yourself, not your landlord. There’s also nothing locking you into a 50-year term. If you want to become debt-free, and have the cash to do it, you can always pay off the house early. Based on this same logic, it’s probably better to re-invest it and try to capture the arbitrage. But depending on one’s lifestyle, it never hurts to de-risk and reduce your leverage.
And beyond the financials: you can paint the walls, build a fence, adopt a dog, or remodel your kitchen without asking permission, because you own the property.
Critics calling the 50-year mortgage “predatory” are missing the forest for the trees. Yes, the total interest paid is higher. But for most people, the goal isn’t to pay off a house: it’s to live affordably, build wealth, and hedge against inflation.
In that sense, Trump’s 50-year mortgage proposal could be one of the most transformative financial tools in modern housing. It makes ownership possible for millions locked out of the market and for those who understand how leverage, appreciation, and inflation interact, it’s not just a path to homeownership.
It’s a path for thousands to achieve long-term wealth.
On the date of publication, Caleb Naysmith did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
