In line with all of President Trump’s ridiculous proposed ideas, he has a brand new one to reveal to prospective homebuyers. Imagine if you could take the idea of a 15 or 30-year mortgage and expand that to 50 years. Yes, you heard that right. Trump is proposing the idea of a mortgage that would span an entire 50 years, which just sounds like a whole host of issues waiting to happen. In the short run, it might look like you’re saving every month, but in the long run, you’re paying more, and one Washington, DC man breaks it down with basic math for Trump to understand.
TikToker and realtor Zach Loft had quite the response for President Trump’s mortgage proposal. On paper, it may sound like a unique and even successful way to get people into homes at a time when homes are virtually unaffordable for many. But when you really dig deep into the plan, you would be paying way more in finance charges than with a shorter loan term. The interest rate would be unmanageable for many, especially considering you’ll pay so much more for a house that isn’t “worth it” in the long run.
On top of that, you’d be well over retirement age by the time your home is paid off. Some people would never even experience paying off the entire mortgage because they’d quite literally die before they’re able to. Realtor Zach Loft explains in basic arithmetic why this plan is a terrible idea. The crux of the problem isn’t the monthly payments—it’s the interest rate.
Longer loans, like a 50-year loan, would have higher rates than, say, a 30-year loan. Even 15-year loans have a higher monthly cost but you pay less in interest overall. That’s the trade-off. As Zach Loft explained, banks are taking a massive risk when they allow a mortgage like this to happen. In 50 years, you’ll find that you paid for the entirely of your house’s price almost twice.
Though the idea of a 50-year mortgage has not yet been approved, it comes with so many risks to homebuyers. These same homebuyers might have stars in their eyes seeing an “easy” way into their first home. But it pays to stay aware of these risks so that you can avoid unnecessary stress in the long run. You certainly wouldn’t want to be in debt for the rest of your life.
As one commenter pointed out, “Because they want us to be debt slaves forever,” which is ultimately the goal. After all, the average home buyer is 40 years old. Would you want to pay off a house by the time you’re 90? That’s not a house, that’s a coffin.
In reality, it’s a ploy to give the banks more of your hard-earned money. Like one commenter put it succinctly: “$200 a month diff with a 400k interest difference. The banks are salivating,” or, in other words, you’d be filling a rich banker’s pockets. How President Trump believes this is meant to help the working class is beyond me.
