SAN DIEGO (KGTV) — The Trump administration announced they’re working on a 50-year loan program designed to lower monthly mortgage payments for home buyers, generating significant discussion about the potential benefits and drawbacks of extended loan terms.
The proposal aims to make home ownership more accessible by reducing monthly payment amounts, though financial experts warn about the long-term costs.
“They could qualify for up to 18% higher on the price of the home,” said Desiree Lowe, the producing branch manager at Supreme Lending. “In a market like this, that could be a difference between them being able to buy at all.”
The impact could be particularly significant in expensive markets like San Diego, where housing costs remain high due to a supply and demand issue.
However, extending loan terms comes with financial trade-offs. When buying a home, the longer the loan term, the more interest buyers typically pay over the life of the loan. This makes shorter loans generally better financial decisions in the long run.
Lowe also warned against people entering into these loans without considering the fluctuating housing market: if their home evaluation drops in the long lifespan of the loan, the home buyer would likely be underwater, owing more on the home than it is worth.
“I don’t think charging someone more interest is in their best interest,” Lowe said. “Another drawback is going to be you’re going to be paying your principal down a lot slower.”
The Federal Housing Director also posted on X, saying that the average lifespan of a home loan was 8 years.
However,even if someone moved after barely paying down a 50-year mortgage, they wouldn’t have as much equity to carry into their next home purchase, Lowe warned.
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