Radio Rothbard How 50-Year Mortgages Turn Home Owners into Renters
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Nov 26, 2025 Dive into the controversy surrounding 50-year mortgages. These lengthy terms may lead homeowners to become effectively renters, as they accrue little equity and face high underwater risks. The conversation explores the political motivations behind the proposal and the potential for increased bailouts costing taxpayers. Historical parallels with risky loans before 2008 highlight concerns about affordability and government intervention in housing finance. The long-term ramifications could reshape home ownership and inflate the financial landscape.
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Longer Term Cuts Monthly Savings, Raises Total Cost
- A 50-year mortgage only modestly lowers monthly payments compared with a 30-year loan while greatly increasing total interest paid.
- Ryan McMaken argues this makes borrowers de facto long-term renters who pay banks far more over time.
Term Length Drives Explosive Interest Costs
- Extending loan terms multiplies lifetime interest so 50-year loans can cost borrowers over a million dollars more in interest.
- McMaken shows a $500,000 loan at 6% rises from ~$259k interest (15y) to over $1M interest (50y).
Slow Equity Means Higher Risk Of Being Underwater
- Equity builds far more slowly on 50-year mortgages, leaving owners vulnerable to modest price drops.
- McMaken notes average US tenure (~8 years) means buyers would have paid off only tiny principal amounts.