50 Years a Slave

Trump’s 50-Year Mortgage Turns the American Dream Into Debt Servitude

President Trump recently proposed a solution to America’s housing affordability crisis: stretch the standard 30-year mortgage to 50 years.

The pitch sounds reasonable enough. Lower monthly payments. Easier to qualify. More families can “afford” to buy.

Except they can’t. Not really.

You may recall that last week, I wrote about how homeowners are trapped—can’t sell without losing their low rates, can’t stay without burning through equity.

Apparently, the Trump administration’s answer to that problem is to make the trap permanent.

Now, to be fair, proponents have a counterargument. They point out that the 30-year mortgage itself was once considered radical too. It was created during the Great Depression to help regular families when most loans ran just 5 to 15 years with balloon payments at the end—accessible only to the wealthy.

So why not do it again? If 30 years worked in the 1930s, why not 50 years now?

Here’s why: because a 50-year mortgage isn’t designed to “help families own homes.” It’s designed to keep them paying the bank forever.

Let me show you the numbers.

The Math They Won’t Get Into

Say you’re buying a $500,000 home — pretty standard in the West and Northeast, where most Americans live. You put down 20% — $100,000 — and finance the remaining $400,000 at 6.3%.

With a 30-year mortgage, your monthly payment comes out to about $2,476.

With a 50-year mortgage, that drops to around $2,195 a month.

You’re “saving” roughly $281 a month — about 11.3% less.

Sounds pretty good, right?

Now here’s what they’re not telling you.

Over 30 years, you’d pay about $491,000 in total interest on that loan.

Over 50 years? You’d pay roughly $917,000 in interest.

Read that again.

You’re paying over $425,000 MORE — just to save $281 a month.

Put another way: you’re spending nearly half a million dollars to save the cost of one nice dinner out per month.

And that’s assuming the bank even gives you 6.3%. If you’re signing up for a 50-year mortgage, they’ll almost certainly charge more, not less, because they’re taking on two extra decades of risk. So the real cost could be even worse.

But even using these conservative numbers, the deal is insane. You’re basically working an extra 20 years to pay off the same house — and handing the bank nearly half a million dollars for the privilege.

This Doesn’t Make Housing Affordable

But here’s the part that really gets me.

If the government rolls out 50-year mortgages nationwide, what do you think happens to home prices?

They go up.

Because if everyone suddenly qualifies for cheaper monthly payments, sellers don’t drop their prices. They raise them. They know buyers can “afford” more now. So that $500,000 house becomes a $540,000 house. Maybe $550,000. The monthly payment advantage quickly disappears—eaten up by higher prices.

It’s the same dynamic we’ve seen with every government intervention in housing. Subsidize demand, and prices rise to absorb the subsidy. Every single time.

And once you start down this path, it doesn’t stop.

Japan tried this exact playbook. When housing became unaffordable in the 1980s and ‘90s, banks started offering 50-year mortgages. Then even longer terms—some reports mention 70- and even 100-year mortgages (though the details are murky).

People were literally passing their mortgage debt to their children.

That’s not home ownership. That’s generational debt servitude.

And that’s exactly where we’re headed if this becomes policy.

Who Really Wins Here?

Let’s be clear about who benefits from 50-year mortgages.

Spoiler: not you. You end up paying almost twice the interest for a house that costs more than it did to begin with.

But realtors? They’re getting fatter commissions on higher home prices.

Banks? They’re making interest income for an extra 20 years.

Builders? They’re moving more inventory because more people “qualify.”

Wall Street? They get to securitize decades more mortgage debt.

Everyone in the housing industrial complex wins.

Except the family signing up to pay the bank for half a century.

Because here’s the truth: you’re not buying a home with a 50-year mortgage. You’re buying a monthly payment. The price? A lifetime of debt servitude that runs right through your career and into retirement.

What Would Actually Fix This

You want to know what would actually make housing affordable again?

Stop blocking construction. That’s it. That’s the answer.

Housing is expensive because there isn’t enough of it. And there isn’t enough of it because zoning laws, building codes, and endless permitting processes make it nearly impossible to build.

Reform zoning so builders can actually build. Cut the regulations that add months and tens of thousands of dollars to every project. Let the market work. When supply increases, prices fall. Basic economics.

There are other ideas worth considering too. Let people carry their mortgage rate to their next house so they’re not trapped by the lock-in effect. Let private lenders use rental payment history when qualifying borrowers—proof you can pay rent is proof you can pay a mortgage. Raise the capital gains exclusion on primary home sales so homeowners aren’t penalized for moving.

And maybe—just maybe—stop engineering a financial system that subsidizes institutional buyers and crowds out regular families. After all, between ultra-low rates, money printing, and a tax code built for large investors, the government has spent years tilting the playing field toward Wall Street instead of households.

None of these require new government programs. None of them require subsidies or cheap credit or creative financing schemes.

They just require getting government out of the way and cutting off the special treatment that keeps the big players winning and everyone else losing.

Regards,

Lau Vegys

P.S. What Trump is proposing with 50-year mortgages is just another sign of the times: everything is accelerating. Debt, interest costs, financial engineering—it’s all accelerating. That’s exactly what we talked about in last month’s Crisis Investing issue. We also highlighted an early-stage precious-metals company positioned to benefit from this acceleration. Even if you’re not a paid subscriber, I’d still recommend checking out the lead story—it’s free for all subscribers.