A Long-Term Fix with a Long-Term Cost
The Trump administration’s proposal to introduce a 50-year mortgage, a radical shift from the traditional 30-year loan, would bring short-term relief to homeowners but at a steep long-term price, according to a new analysis from UBS Global Research.
The report estimates that borrowers would save roughly $119 per month on average mortgage payments under the proposed system but would end up paying nearly twice as much in interest over the life of the loan.
“The policy would improve short-term affordability but significantly increase lifetime borrowing costs,” said Jonathan Pingle, UBS chief U.S. economist. “It’s a political win, not necessarily a financial one.”
How the Numbers Break Down
UBS modeled a typical $400,000 mortgage at a 6.5% interest rate, comparing a standard 30-year term with the proposed 50-year version.
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30-year loan: Monthly payment around $2,528, total interest paid $510,000.
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50-year loan: Monthly payment around $2,409, total interest paid $956,000.
That means a savings of $119 per month, or about $1,428 annually, but an extra $446,000 in total interest over the lifetime of the mortgage.
“The extended term spreads the pain but doesn’t reduce it,” Pingle wrote. “It makes homes feel more affordable while locking borrowers into decades of higher costs.”
Who Would Benefit the Most
UBS analysts say the policy could make a tangible difference for first-time buyers, especially younger households struggling with record home prices and high mortgage rates.
“Every $100 saved per month could bring millions of sidelined buyers back into the market,” said Christina Clifton, senior housing strategist at UBS. “But those same buyers would take on loans that last nearly a working lifetime.”
While wealthier homeowners might use the loans strategically for cash-flow flexibility, the primary beneficiaries would be middle-income Americans in expensive housing markets, particularly in states like California, Texas, and Florida, where affordability has eroded fastest.
The Bigger Picture: Housing Gridlock
The 50-year mortgage proposal, first floated by President Trump’s housing policy team, is part of a broader plan to “break the gridlock” in the housing market by extending loan maturities and freeing up demand.
It comes amid a severe national housing shortage, with fewer than 1 million homes for sale nationwide, roughly half the normal level—and average home prices now 40% higher than pre-pandemic levels.
But critics argue the plan would treat the symptoms, not the cause.
“This is financial engineering to mask a supply crisis,” said Diane Swonk, chief economist at KPMG. “Longer loans make expensive homes look affordable without addressing why they’re expensive in the first place.”
Wall Street’s Take: Mortgage Innovation or Moral Hazard?
Markets have reacted cautiously to reports of the proposal, with mortgage-backed security (MBS) traders warning that ultra-long-term loans would introduce new duration risks and weaken investor appetite.
“Fifty-year paper changes the calculus for everyone,” said Jeffrey Sherman, deputy CIO at DoubleLine Capital. “It’s harder to price, harder to hedge, and makes refinancing cycles more volatile.”
Still, homebuilder and mortgage lender stocks rose modestly after the news broke, with Lennar, D.R. Horton, and Rocket Mortgage all gaining between 2–3% on optimism that such a policy could spur housing demand.
A Political Play as Much as an Economic One
Analysts at UBS and Goldman Sachs say the 50-year mortgage proposal also carries a strong political dimension. By making homes appear more affordable, without directly cutting rates or launching new subsidies, the administration can claim progress on affordability without adding to federal spending.
“It’s a creative way to show action on housing,” said Clifton. “But the arithmetic doesn’t change: borrowers will still pay far more over time.”
Critics liken the plan to longer student loans, an arrangement that stretches payments over decades while entrenching debt dependency.
Global Precedents and Lessons
Countries such as Japan and the United Kingdom have experimented with ultra-long mortgages, sometimes stretching to 100 years, often passing debt between generations.
Japan’s experience during the 1980s real estate boom offers a cautionary tale. “It provided temporary relief,” said Swonk, “but also inflated property prices and saddled families with intergenerational debt.”
UBS warns that similar dynamics could emerge in the U.S. if the policy gains traction. “When credit expands without addressing supply, prices tend to rise – not fall,” Pingle said.
The Bottom Line
Trump’s proposed 50-year mortgage could ease monthly pressure on homeowners, but UBS’s analysis makes the trade-off clear: modest short-term relief at enormous long-term cost.
While it may offer temporary political appeal and boost housing activity, the move risks creating a generation of Americans paying off homes long after retirement.
As UBS concluded: “It’s a plan that solves today’s problem by borrowing from tomorrow, literally and figuratively.”
