Hard Pass on the 50-year Mortgage. 🏡🙅

Brock's newsletter | NOVEMBER 14, 2025

Hard Pass on the 50-year Mortgage.

Apparently 50-year mortgages might become a thing - thank you to everyone who forwarded me articles.

For the record, I don’t mind these in theory. Loans are just financial products, like life insurance or mutual funds - lots of consumer options are good for buyers. And the idea behind the 50-year mortgage is that your monthly payment would be lower than the 30-year. Sounds nice.

But it's a hard pass. Here's why.

Why the 50-year mortgage?

It's the federal government's proposed solution to housing affordability.

As you all know, home prices are up 56% since 2020. There are four main reasons:

Not enough houses being built (zoning, regulations, etc.)
Pandemic inflation hit everything, including home prices
Rising construction costs
The Fed's interest rate rollercoaster created chaos

Remember 2020-2021? Everyone got 2-3% mortgages, homes sold instantly, bidding wars everywhere. Now that the rates have doubled people are “locked in” to their low rates - nobody wants to sell their home and lose their rate, and they can't afford to trade up.

And for buyers entering the market with interest rates between 5.5-7%, the cost of owning a home has gotten way more expensive.

It goes without saying that we have a housing affordability issue. You've got to make a lot of dough to afford a house, especially in LA.

Why The 50-Year Mortgage Is Not a Good Solution.

A handful of factors work together to make the 50-year mortgage a terrible option to make housing costs more affordable. Here goes:

First, longer loans have higher interest rates. Banks charge more when they're stuck with your loan for half a century. You pay for the certainty of your payment never changing.

Right now, 15-year mortgages are around 5.5%. Thirty-year mortgages, around 6.5%. Fifty-year mortgages will be around 7%.

So you're paying a higher rate for a longer period of time, which leads to astronomical interest paid over the course of the loan, see below.

Second, loans are amortized so you pay the bulk of interest at the beginning, and start chipping away at the loan balance at the end. On a 50-year timeline, you're looking at 35/40 years before you start meaningfully chipping away at your debt and building equity.

Third, you old! Research shows that the median age of a first-time homebuyer is now 40 (in 1991 it was 28).

With the front-loaded interest, you'll have barely made a dent in terms of paydown by the age of 65. No bueno.

Last, the difference in your payment is pretty nominal, but the difference in your interest payment is astronomical. For a $1 million loan with a 6.5% interest rate, you would have monthly payments of $6,320/mo for a 30-year loan versus $6,016/mo for a 50-year loan. You’re saving $304 bucks a month. But the total interest paid would be about $1.334 million more over 50 years versus 30 years. Yikes.

In sum: you barely save anything monthly, and you pay WAY more overall. Hard pass.

Other Options to Save on Your Monthly Payment.

Okay, so here we are, still with high rates and high prices. Here are a few ideas to keep your payment down:

Interest-Only Loans. Honestly, if you want to get creative to get into a house, try to get an interest-only (IO) loan.

IO loans have a payment equivalent to a full percentage point lower. In other words, getting a 6% IO loan has the same payment as a 5% 30-year loan.

But I’ll never pay my house off! Relax. You’re going to move or refinance soon anyway, I guarantee it. And besides, after paying for 10 years on a 30-year home loan with a 6% interest rate, you will have paid off only 14% of the original principal.

So take the lower payment and get your house.