President Donald Trump will propose a 50-year mortgage plan in the hopes of encouraging more people to buy homes.
“Thanks to President Trump, we are indeed working on The 50-year Mortgage – a complete game changer,” Federal Housing Finance Agency Director Bill Pulte announced Saturday on X.
So, what would that accomplish?
Primarily, it would decrease your monthly mortgage payment which would, in turn, make home ownership more affordable, especially for younger people. Currently, the average age of a home buyer is age 40, an all-time high.
Is there a downside to this proposal?
Not really.
Yes, the best way to bring down the cost of a monthly mortgage payment would be to decrease the purchase price of homes. This can be done in two ways: 1) deport the tens of millions of illegal aliens whose very presence puts a strain on housing availability and drives up costs, and 2) build more housing.
In the absence of that, the 50-year mortgage plan is a good one.
Why?
A number of reasons.
First off, it is always-always-always better to own a home than to rent. If you rent for 50 years, you got nothing at the end of 50 years. If you pay into a mortgage for 50 years, you are at least purchasing something.
Then there’s the fact that you are not required to pay your mortgage off over 50 years. Some mortgages come with early payment penalties (avoid those), some don’t. Either way, by using an online mortgage calculator, you will see how much money you will save and how much quicker you can pay off your mortgage simply by, say, making 13 payments a year instead of 12r.
My wife and I had a 30-year mortgage. Had we made the minimum payment, we would still have two years left on that note. We paid off our mortgage in seven years. It wasn’t easy, but we saved a couple of hundred thousand in interest payments.
What this means is that the 50-year mortgage will get you into a home sooner, but as time passes and you (hopefully) make more money, you can turn it into a 30-year mortgage, or a 20-year mortgage, or a seven-year mortgage like we did.
Then there’s the all-important issue of ownership.
Yes, as with any investment, you can choose poorly and end up with an asset where you owe more or paid more than it is worth. It happens, especially if you buy a house in a bad or deteriorating neighborhood. Overall, though, property tends to increase in value, so…
If you purchase a $400,000 home, in ten years, it could be worth $650,000. Believe me, that’s not unheard of. Over 28 years, our house has quadrupled in value. So, let’s say that over those ten years you’ve paid $220,000 in interest toward your mortgage… Look at you, you’re up $30,000.
As more years pass, you’ll have more equity and the home will increase in value.
Again, yes, you can lose, but here’s a worst-case scenario…
You buy a home for $400,000. Over those 50 years you pay $1900 a month for your mortgage. Worse still, due to the interest over those 50 years, you’ve paid a total of $1.2 million for this $400,000 home. But the neighborhood took a dive, and now you can only sell it for $250,000, which is almost $1 million less than what you paid.
At the very least, you will have $250,000.
You gotta live somewhere, right? Are you better off paying $1900 a month in rent and ending up with nothing, or paying $1900 a month towards a mortgage and ending up with $250,000?
Also, at the end of 50 years, you can choose not to sell. Now you’re 77 years old and have no mortgage or rent payment because the house is yours free and clear. Beats making that rent payment, no?
Granted, these are all back-of-the-envelope calculations that don’t include property taxes and maintenance. I’m not making a math argument here. I’m making a case as to why it is almost always better to own than to rent, and if a 50-year mortgage can get people into a legitimate asset earlier, that will almost always be a good thing.
Debt is a form of slavery. If you rent, from cradle to grave, you are always in debt to your landlord. A 50-year mortgage is a way out of debt, a path to owning an asset free and clear, a chance to increase your financial standing.
We’re only here because Democrats successfully imported tens of millions of illegal aliens and refuse to build new homes. Democrats want you enslaved from cradle to grave. But here is where we’re at, and a 50-year mortgage is not a terrible workaround until things change—if they ever do.
John Nolte’s first and last novel, Borrowed Time, is winning five-star raves from everyday readers. You can read an excerpt here and an in-depth review here. Also available in hardcover and on Kindle and Audiobook.
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