No kidding they are floating the idea.
https://www.youtube.com/watch?v=WWmI9KDSl8k
My only thought as to why would be to get your foot in the door and remortage your home at 20 years later.
Dumb idea. I mean like really, really dumb. Attempting to sign up for a 50 year mortgage should be grounds to have you adjudicated as mentally incompetent.
A 50 year term will save you very little on monthly payments but will cost a shit ton more in the long run, and equity… Yeah forget about it, not gonna happen.
It could be a foot in the door tool for young buyers. Huge window of years to refi when their income goes up and the rates are favorable.
And is it much worse than renting your whole life?
Thats why you pay on it long enough and refinance immeadiatly.
When I first came back to the States, I had 0 credit history, I bought a House with a veriable mortage, which is essentailly a 50 year mortgage.
Paid a year and refinanced.
Worked well for me.
I wouldn’t personally do it.
I think it is probably a bad idea.
Some countries with even tighter markets offer even longer mortgages.
Might be a good time to buy some stocks in banks, that is a lot of long term income from servicing interest on those loans.
I haven’t done any math about it, but the scenario I think maybe this could be useful in is a young military dude that has nearly guaranteed long-term employment, with nearly guaranteed raises and can take advantage of low interest rates when available, but currently has below-median income. He’d then pay extra on the mortgage every month as his income levels up and apply his bonuses to that if applicable.
Or maybe a dude that has seasonal swings in his income, and desires a low monthly obligation, but pays extra when possible.
No one says you have to wait 50 years to pay it off. But, this line of reasoning assumes responsibility and financial literacy, which might be assuming too much.
My own mortgage interest is below the risk-free rate (treasury bill returns), so that might not be as predictably lucrative as one might expect, especially considering these loans are unlikely to be risk free.
Like I said, I had a difficult time getting an inital mortgage because I had never bought anything on time. Everything was cash and carry.
When I went to buy a House I had zero a near zero credit score becuase I had not bought anything.
That variable mortgage scared me so I paid a little extra every month and got into a low fixed rate in a year.
Also if youre a young Military guy chances are VHA is paying anyway.
Nothing wrong with having more options.
A lower monthly payment on 50 could help a buyer qualify when he might not otherwise on 30. Sitting on the sidelines saving more for a larger downpayment in order to qualify while watching home prices soar ain’t such a great position to be in. Perhaps a buyer could use even a small amount of extra cash for a new business or investments… lots of reasons that a 50 might be more attractive depending on circumstances.
Just doing rough math in my head a $500,000 30 year @ 6% is going to have around a $3000/mo payment. A 50 year will be about $2800/mo. Not much difference, That is also assuming the same interest rate. My guess is that if 50s come around n they will be at least a quarter to a half point higher.than a 30, all else being equal, so you would lower the payment by even less.
While I can see your points about getting one’s “foot in the door”, it really makes me nervous. As 1168 (and others) points out, someone with a plan and the will to stick to it could use this short term. But I agree that the financial literacy and discipline is woefully lacking amongst those who would largely be enrolling in these mortgages.
But hey, what do I know. Folks are getting 8 and 10 year auto loans, so why not a 50 year mortgage. 
$500K 6% 30 years = $2997 interest/principle only
$500k 6% 50 years = $2632 interest/principle only
That’s quite a difference for someone having difficulty qualifying or needing extra cash for other things.
Especially in an environment with rising home valuations as seen in recent years. How’d ya like to be on the outside looking in with home prices soaring since Covid.
It’s not unusual in my area for property values to have doubled in Ten years. So, if that would pick-up again who knows?
I would have a count down Calander though that would tell me exactly when to apply again for a 20-year mortagage.
I remember my Grandfather telling me that he had paid more for his Chevy Silverado than he had for his entire farm in the 30"s.
It’s a “Tool” that can be used or misused.
Saw Trump speaking of that and just shook my head. He’s about at that point where he’d just soon build a “house of cards” economy to publish some “look what I did” numbers. Not good imo.
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Ok, so I did some math, and this looks like a bad idea. Average “savings” with all else being equal, look like around $200-$250/mo. However, there are two problems with that.
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Lenders want to be compensated for risk and value, and time has both of those things. So it looks likely that a 50yr would come with .75%-1% higher interest rate, making the monthly savings close to nothing. The only scenario this works for the homebuyer is low current interest rates combined with forward sustained high inflation. Basically the same irresponsible strategy the politicians use for the budget deficit, except the individual has no mechanism to manipulate inflation or interest rate.
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We don’t have an income or affordability problem. We have a supply and demand problem. This will alter supply/demand, causing house prices to rise, negating any possible savings, maybe even worse. Much like drops in interest rates or subsidized downpayments drive prices up, but increases in rates don’t always drive prices back down.
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We also have a terrible “living beyond your means” problem. It is partially reflected in credit card debt. Automobile loans are another. They’ll soon reach years financed as houses once were.
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I have a hard time believing any lenders will willingly do a 50 year mortgage. If so it will be with much higher interests rates and backed by my tax dollars. Then, like the student loan debt, folks making bad decisions will demand mortgage forgiveness and politicians will go for it to get votes.
Lifestyle creep is the reason internet people think poverty is the norm in the US. Well, that and foreign propaganda.
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The US is the only country where there is an obesity epidemic among the “poor”.
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The US is extremely prosperous.