OT: 50 year mortgages?

[purplefaithful]

We agree on one thing, trying to better the lives of our future generations...This is going to make it that much harder at a macro level:

[badgervike]

We agree on one thing, trying to better the lives of our future generations...This is going to make it that much harder at a macro level:

We only agree on one thing PF?  lol.

There isn't a chance in hell we solve the debt crisis with the division in this Country.  You try to cut anything and you're killing babies, or seniors, or puppies.  Look at the angst over DOGE.  There's no bipartisanship anymore where bills of importance are passed on a truly bipartisan majority...and certainly not spending bills.  A bipartisan bill these days is 8 Senators from one party.  The US debt jumped way up during Covid and didn't come back to its pre-Covid levels...it was artificially inflated to the Covid levels with spending bills.

[mblack]

Now there is wait for it…. 15 year car loan to go with your 50 year home loan.

[medaille]

We only agree on one thing PF?  lol.

There isn't a chance in hell we solve the debt crisis with the division in this Country.  You try to cut anything and you're killing babies, or seniors, or puppies.  Look at the angst over DOGE.  There's no bipartisanship anymore where bills of importance are passed on a truly bipartisan majority...and certainly not spending bills.  A bipartisan bill these days is 8 Senators from one party.  The US debt jumped way up during Covid and didn't come back to its pre-Covid levels...it was artificially inflated to the Covid levels with spending bills.

You can't solve the debt crisis because there's not enough money to pay off the debt.  If you were to try and pay off all the debt, what would happen is that you would eliminate all the money that is in circulation, and you would still owe massive amounts more money.  This lack of money in existence would mean no one would have money to buy anything, your work wouldn't have money to pay you, and everyone would have to go into more debt to create the money.  This is what life inside a fractional reserve banking system is like.  

The only way to actually pay off the debt is to create money outside of debt (aka the trillion dollar coin)

[BigAl99]

You're still not understanding.  Let's just make this simple and say that you have a $400k loan on a $450k home.  Your monthly interest payments would be $2382.45 all of which is interest at the beginning.  That's a total house payment of $286k over 10 years with virtually zero pay down on the note.  Now..that $450k home is increasing in value by an average of 4% a year.  That home is worth $667k or an increase in value of $217k over 10 years.  So..you've increased the value of your house by $217k and made TOTAL payments of $286k.  You're out of pocket $69k over 10 years for an increase in home value of $217k.  At that point, you convert that original 50 year note to a shorter term and you're good to go...especially if the interest rates decline.  The key is to wait for some equity to build in the house and interest rates to be at a reasonable amount and refinance.  That will cost you a small amount to refinance.

By contrast...you could continue to pay $2500 per month for rent (assuming rent never goes up..lol) over 10 years.  That's $150k out of pocket.

I just used simple numbers.  The reality is that yes..you will make investments in your house.  Rent will also likely increase over the years.  You will also have to have a down payment of some nature.  Pretty sure, the government doesn't want to get in the market of guaranteeing loans for those with no collateral and credit history once again.  Most of us remember the financial crisis when "everybody deserved to own a home".

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That value is the 20 year AVERAGE per year across the Country.  Your house is an investment just like all investments there's no guarantee but the AVERAGE rate of return is 4%.  I've actually done better than that over the years.  Some of it's due to luck and some due to planning.  A home purchase is your single biggest investment.  Treat the purchase as such.

I do understand, what you are not getting is the concept of debt and tangible assets.  I think you live in a world where a home equity line of credit, HELOC, is a tool to achieve wealth, without understanding or appreciating the dynamics of a Monte Carlo distribution over time.  My values are different than yours, when it comes to my families security, my home has not been in that calculus, that is not money I bring to the table.  The only time a pre-sale value is used is a HELOC, or a second mortgage as was the original term, and that usually does not work out well for the borrowers bottom line.  It has been rebranded from a desperation move to a leveraged asset for attaining wealth.

I have had some luck and effort payoff over the years, but it don't make me stupid.  When I see someone say "20 Year AVERAGE across the country" as a reason to buy in, I think 1.) Mean, Mode or Median 2.)  How dumb does he think I am 3.) Hard no on that.  

Badger Ive heard you claim to be everything from a Geophysicist, CEO producing medical products in China, Scientist of some sort who doesn't believe in peer review, all the while volunteering to help the homeless and downtrodden..... you always give me great... 

Al the Bus driver

[Vanguard83]

There are people who actually pay off a mortgage ??

DAMN..

[mblack]

There are people who actually pay off a mortgage ??

DAMN..

You crack me up

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You're still not understanding.  Let's just make this simple and say that you have a $400k loan on a $450k home.  Your monthly interest payments would be $2382.45 all of which is interest at the beginning.  That's a total house payment of $286k over 10 years with virtually zero pay down on the note.  Now..that $450k home is increasing in value by an average of 4% a year.  That home is worth $667k or an increase in value of $217k over 10 years.  So..you've increased the value of your house by $217k and made TOTAL payments of $286k.  You're out of pocket $69k over 10 years for an increase in home value of $217k.  At that point, you convert that original 50 year note to a shorter term and you're good to go...especially if the interest rates decline.  The key is to wait for some equity to build in the house and interest rates to be at a reasonable amount and refinance.  That will cost you a small amount to refinance.

By contrast...you could continue to pay $2500 per month for rent (assuming rent never goes up..lol) over 10 years.  That's $150k out of pocket.

I just used simple numbers.  The reality is that yes..you will make investments in your house.  Rent will also likely increase over the years.  You will also have to have a down payment of some nature.  Pretty sure, the government doesn't want to get in the market of guaranteeing loans for those with no collateral and credit history once again.  Most of us remember the financial crisis when "everybody deserved to own a home".

---

That value is the 20 year AVERAGE per year across the Country.  Your house is an investment just like all investments there's no guarantee but the AVERAGE rate of return is 4%.  I've actually done better than that over the years.  Some of it's due to luck and some due to planning.  A home purchase is your single biggest investment.  Treat the purchase as such.

At the bold… we can do the exact same thing with a 30 year loan today. So again what’s the use of the 50 year option? How on earth is this a solution?
You keep repeating that you get a lower payment so more people are enticed to borrow to allow the banks get more free money in interests, origination and closing costs plus mortgage insurance.
Your whole premise is based on people waiting for the value of their home to go up and then refinance (which still costs money no matter how small).
What if the home does not appreciate as expected or what if the rates don’t go the direction they need? Let me guess, this will not be the case if the homebuyer does their research right?
All the work and risk is still on the home buyer who already is laden with other debt. However the banks don’t do anything to make more money. So please tell us how this is a solution to help the future generation?
Sounds to me like another opportunity to squeeze money from young people and add more risk and uncertainty to their already bleak futures.
Like many have said this 50 year idea is a terrible one no matter how much you try to justify it.

[StickierBuns]

Its all broken down here and explains exactly why its so bad:

https://wolfstreet.com/2025/11/11/a-50-y...investors/

The amount of stubbornness on this is something else, because there is no defending a 50 year mortgage financially. None. The more mental gymnastics done trying to defend this concept just makes it worse and you soon realize that because this is being toted out there in a partisan way is the main reason why its being 'defended'. Which I find sad but its not surprising. The only thing better than a 50 year loan under this misguided logic would be a 70 year loan. I mean there's no ambiguity here, its a straight up horrific option to purchase a home. Its black and white. This isn't an 'agree to disagree' concept, lol. There is a right and a wrong answer, its straight up financial math. That this thread has gone on for 6 pages, with ample examples about WHY its such a bad idea leads me to believe we've gone too far down the hole for anyone to admit they might be wrong about this. Listen, I've bought and sold 8 houses in 3 different states....I can tell you that even a 30 year mortgage isn't optimal either. My house is paid for and I have zero debt, but I understand that maybe not everyone can do that. But just because home ownership costs have never been higher doesn't mean you put yourself in a horrible financial situation either. That isn't the solution, that's predatory lending.

Its a great illustration of why, as a country, we'll always now be a 'them vs. us' mentality because we won't be able to agree on even the most obvious things. It also exemplifies why you have to be your own advocate and be skeptical because no matter who or what party is leading the country, they don't care about us. And as soon as you realize that in a real way, you'll have more clarity of thought.

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Now there is wait for it…. 15 year car loan to go with your 50 year home loan.

...and 6 year loans on furniture and appliances.

[pattersaur]

The problem with something like this is that even if you don't do a 50-year mortgage and try to continue saving up for a 30-year mortgage, a ton of other people jump on the 50-year offer and housing prices climb accordingly-- potentially outpacing your ability to save. This gives fiscally responsible people FOMO and causes even more to go for the 50-year mortgages than maybe otherwise would.

Hopefully this is all a nothingburger and no one is even talking about it by this time next week.

[JimmyinSD]

Its all broken down here and explains exactly why its so bad:

https://wolfstreet.com/2025/11/11/a-50-y...investors/

The amount of stubbornness on this is something else, because there is no defending a 50 year mortgage financially. None. The more mental gymnastics done trying to defend this concept just makes it worse and you soon realize that because this is being toted out there in a partisan way is the main reason why its being 'defended'. Which I find sad but its not surprising. The only thing better than a 50 year loan under this misguided logic would be a 70 year loan. I mean there's no ambiguity here, its a straight up horrific option to purchase a home. Its black and white. This isn't an 'agree to disagree' concept, lol. There is a right and a wrong answer, its straight up financial math. That this thread has gone on for 6 pages, with ample examples about WHY its such a bad idea leads me to believe we've gone too far down the hole for anyone to admit they might be wrong about this. Listen, I've bought and sold 8 houses in 3 different states....I can tell you that even a 30 year mortgage isn't optimal either. My house is paid for and I have zero debt, but I understand that maybe not everyone can do that. But just because home ownership costs have never been higher doesn't mean you put yourself in a horrible financial situation either. That isn't the solution, that's predatory lending.

Its a great illustration of why, as a country, we'll always now be a 'them vs. us' mentality because we won't be able to agree on even the most obvious things. It also exemplifies why you have to be your own advocate and be skeptical because no matter who or what party is leading the country, they don't care about us. And as soon as you realize that in a real way, you'll have more clarity of thought.

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...and 6 year loans on furniture and appliances.

Why not...our govt is loaning money to cities everyday on paybacks that are twice the life of the products they are installing/purchasing.   Students get loans for degrees that will never ever cover the costs of of those loans.  Credit companies loan money to people with no logical means of paying it back.... we have a debt illness and its from the top down.