NASHVILLE, Tenn. (WTVF) — President Trump has floated the idea of 50-year mortgages as a potential solution to housing affordability challenges.
It’s drawn support from many people, including Federal Housing Finance Agency Director Bill Pulte.
While this option could reduce monthly payments, a mortgage expert I heard from in Nashville warns it comes with significant long-term costs.
For the past five years, Christi Wedig has been helping people navigate the biggest purchase of their lives.
"My favorite part is to look at ways to create a solution to get people into a home," said Wedig, a loan originator for The Wedig Team with CMG Home Loans in Franklin.
Wedig said that on a typical Nashville mortgage loan amount for a $400,000 home, borrowers would see savings of about $250 per month compared to a traditional 30-year mortgage.
However, those monthly savings come at a steep price over the life of the loan.
"Over 30 years, you're going to pay a total amount of interest of $472,000. When we flip that to a 50-year mortgage, your interest goes up to $880,694, so you double the amount of interest that you're paying," Wedig said.
The structure of mortgage payments would also change significantly with a 50-year term.
While the principal amount remains the same, the interest portion grows substantially, creating a different payment ratio throughout the loan's life.
This is particularly evident in the early years of a 50-year mortgage, when borrowers would pay very little toward the principal balance.
"The first 10 years is so small that it really starts to call into question — does it really make sense to buy?" Wedig said.
Wedig noted that borrowers could achieve the same monthly payment reduction by securing an interest rate that's just one percentage point lower on a traditional 30-year mortgage.
Such rates are often achievable through seller credits and other incentives available in today's market.
Given these factors, Wedig said she wouldn't recommend a 50-year mortgage to her clients if the option becomes available, but is thankful that they’ve been proposed to keep the greater conversation about housing affordability solutions going.
Click here for more information about the proposed 50-year mortgages.
The 50-year mortgage remains in early conceptual stages and would require legislative changes to become a reality.
This story was reported on-air by journalist Robb Coles and has been converted to this platform with the assistance of AI. Our editorial team verifies all reporting on all platforms for fairness and accuracy.
Do you have more information about this story? You can email me at robb.coles@newschannel5.com.
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