Trump Floats 50-Year Mortgages: Cash Flow Boost or Affordability Illusion?
On The Market
How a 50-Year Mortgage Affects Monthly Payments and Amortization
Dave walks through a median-price example comparing 30- and 50-year mortgages and shows cash flow and amortization differences.
50-year mortgages could be coming sooner than we expected. This week, President Trump announced on social media the possibility of longer mortgage terms hitting the housing market. Extending the standard 30-year fixed-rate mortgage to 50 years will have massive implications for home prices, affordability, and cash flow for rental property investors.
The question is: Will it actually happen? And if it does, how would these new mortgage rules affect your returns on real estate?
We did the math, comparing a 30-year mortgage vs. a 50-year mortgage to see which gives you bigger (total) returns and builds your wealth faster. The cash flow differences are notable and could mark significant improvements for landlords, but one drawback could be so great that investors turn away from this new mortgage entirely.
Dave gives the pros and cons, shares what housing market experts are concerned about, and answers the question: Would he use a 50-year mortgage if given the option?
In This Episode We Cover
Trump’s new 50-year mortgage proposal that could change the housing market
30-year vs. 50-year mortgage returns on rental properties (cash flow, amortization, total returns)
Why one outspoken housing expert is growing concerned about the support for 50-year mortgages
One massive tradeoff that most Americans aren’t aware of when using a longer mortgage period
Is a 50-year mortgage even…legal? What the current mortgage regulations say is and isn’t allowed
And So Much More!
Links from the Show
Join the Future of Real Estate Investing with Fundrise
Sign Up for the On the Market Newsletter
Find Investor-Friendly Lenders
Amortization in Real Estate: What It Is & How To Calculate It
Run Your Rental Numbers with Dave’s Book, "Real Estate by the Numbers"
Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/on-the-market-373
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