"A 50-year mortgage sounds like the next big innovation in housing finance, a way to make homes affordable again in an era of high prices and stubborn interest rates. But the way I was raised and educated, financial independence and straight talk count. Having studied economics at Texas A&M, I see this for what it is: a long, expensive bet that lasts half a lifetime."
"Take a $400,000 home at a 6.5% interest rate. A standard 30-year fixed mortgage would generate around $511,000 in total interest over its lifetime. Stretch that same loan to 50 years, and the interest bill jumps to roughly $870,000. That's $359,000 more, just for the privilege of taking longer to pay off the same home. Financial analysts call that negative leverage, when the cost of carrying debt far outweighs the benefit of cash flow relief."
A 50-year mortgage reduces monthly payments by roughly 15–25% compared with a traditional 30-year loan by spreading payments over twice the time. That lower monthly payment can appeal amid rising home prices, but total interest costs rise substantially. For example, at 6.5% on a $400,000 home, interest on a 50-year loan can approach $870,000 versus about $511,000 on a 30-year loan, adding roughly $359,000 in interest. Ultra-long terms create negative leverage, slow equity accumulation because early payments are interest-heavy, and can extend payments into advanced retirement ages, reducing financial flexibility.
Read at www.housingwire.com
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