politics

They make it sound like lenders game the system to make the fixed rate loans not super beneficial (refinance costs/etc.). I have no idea how true that is, but even if it is, having a fixed amount you owe each month is so much easier for the everyday person.

I can't imagine having a variable rate loan and then finding out due to the Fed raising rates that I know owe another couple hundred per month.

There should be a progressive tax on anyone that owns a home but doesn't live there. First home is nominal tax. Second home is double that. Third is quadruple. That'd fix housing and rent prices overnight.

And before anyone asks, yes same with apartment complexes. If the owner is forced to live in the complex, there's an excellent incentive to keep it clean and maintained. And I'm specifically talking people, if a corporation owns a complex the top shareholder needs to be living there.

Yes, a 50 year mortgage will drop your monthly payments by a significant margin (maybe 15ish percent) increasing affordability for the long term.

The actual numbers will likely not bear that out. Some back of the envelope math in this article and others has the payments dropping as little as $150 or $200 on a $2000 mortgage.

The problem is that rates for longer mortgages are naturally going to be higher as they are today. Most of the "gain" of stretching out the loan is eaten up by interest.

What does never seem to catch anyone's eye though in general is...you can pay more than the minimum on your mortgage just like any other type of debt. If these products were available, I'd be slightly tempted to use one to lower my required monthly payments slightly while I saved up the principle to repay the loan in full.

Put simply, it decreases your monthly payments but extends how long you will make those payments. So compared to a 30 year mortgage, you'll pay something like 85% as much per month on your mortgage (15% less), but for 167% as long (20 years longer)

0.85 × 1.67 = 1.42, meaning you will end up paying 42% more for the same house in the end. That means you will just about double, give or take, the interest paid to your loaner. And the house wont be yours until 50 years is up, meaning you paid 42% more for a 20 year older house, by the time you could sell it for full equity (i.e. didnt have to pay anything to the loaner). And that is IF you even live for the full 50 year, which most people wont. The average first time home buyer now is already in their 30s, meaning they will be in their 80s by the end of their mortgage. 71-72 is average life expectancy. So instead of inheriting your home, you kids will more than likely inherit an ongoing mortgage, or lose the house to foreclosure.

It’s beyond bad, it’s outright dumb as fuck.

As it stands, a 30yr mortgage at current interest rates means that you end up paying ~$1.20 in interest for every $1 borrowed.

A 50yr mortgage at current interest rates would have you pay $2.50 in interest for every $1 borrowed.

You would end up literally paying 3.5x the value of the mortgage - it’s outright criminal.

When you rent the landlord has to pay taxes and maintainance.

In a recent interview, Trump made it clear that he thought that the standard mortgage now is 40 years.

Yeah, the decrease in monthly payments simply isn't that much. Going from 15 years to 30 is a big decrease. 30 to 50, not so much.

Just think about how many extra streaming services I can pay for now!

Yeah and your $800/mo new car with leather seats gets 6 miles per gallon more than the paid off base model. ExxonMobile is practically paying you now!

For only 240 extra months!

But 89% more in total.

While I fully agree this doesn’t solve any affordability concerns, for those with no affordability concerns that $200/month is better served in a portfolio, which will inevitably have a higher return than a secured interest rate. This does help, but it only helps people with no issues with affording a home in the first place, and can use the system to make further gains (albeit fairly minor).

Look, it's an 80 year old diaper shitting grifter talking about 50 year loans. Gee. I wonder if he cares how that plays out..

I don't see why the banks don't offer that. It's just borrowing from the future like they are already doing.

Anyone who benefits from it doesn't have to wait that long; they can easily sell the debt right now, cash in and retire.

I wish they would. Retire, that is.

I'd rather they be allowed to fuck everyone over right now if only they'd retire. At least they'd be dead in ten years and we can maybe piss on their graves and introduce an inheritance and wealth tax in the meantime to grab back what they stole from the future.

You're joking, but the reverse of that is essentially how early retirement works. Finding a 30-year retirement costs almost the same as an infinite retirement, due to the effects of compound interest. So, if you can increase your income while keeping your spending low, you can afford to retire very early and live off investment income forever.

The parasitic health-denial companies (jokingly called insurance companies) want to return to their previous business model of taking your premiums, then denying any kind of useful coverage.

4 cats? In this economy?

Differences in degree are still differences. Longer is worse.

I think maybe you misunderstand how selling a home with a mortgage works? To be fair, it's possible I don't fully understand as well, but as my understanding goes...

The buyer doesn't just assume ownership of the loan, and start making the same payments as you.° They have to get approved for their own mortgage for the sale price of the house (or buy it outright), and then you use that money to pay off your mortgage's remaining principle.

So, if you have a $400,000 house where you've only paid $50,000 towards the principal over 10 years, out of a 50-year mortgage, and you want to sell it, The buyer pays you $400,000, then you use that to pay the remaining $350,000 of principal, leaving you with $50,000 to go buy a new house. Likely you'll need another mortgage of your own, but you can probably use that $50,000 as a downpayment, to knock down the monthly, or take a shorter term.

So, that's 10 years of mortgage payments, totaling say $250,000, and you only have $50,000 worth of value to show for it. Contrast that with a 15 or 30 year term, and you'd be getting a MUCH larger chunk of your payments back in value.

Having a mortgage isn't the same as renting (it's starting to get pretty comparable with this 50-year shit, though), you are actually building value for yourself as you make payments, no matter how long you live there.

° Technically, Mortgage Assumptions are a thing, but they're EXTREMELY rare. It has to be an option written into the mortgage agreement, from the beginning. In the US, it basically only exists for military personnel and veterans, as a perk that the government mandated to make it easier for military families to move across the country at a moment's notice. Also, it's really just about keeping the interest rate, the buyer still has to come to an agreement with the seller to buy out their accumulated value.

The issue isn't about ownership, per se. It's about acquisition of principle value which you carry with you when you sell the house.

The example halfway down the post of a $400K loan fixed at 6% is a good example: A 15-year loan would have a $3,375.74 monthly payment but pay off $305,364 principle after 12 years. A 30-year would have a $2,398.20 monthly payment, but have only $134,978 paid off. A 50-year has a $2,063.74 payment only pays off $66,251 principle.

This is why it's a particularly bad debt trap. The 15 or 30-year mortgage allows the homeowner to move and have acquired significant principle value, which makes the costs of moving much lower.

And the monthly payment in substance are costlier when you add "interest" (rent into a black hole) and lower "principle" (long-term loan to the bank which is repaid back at sale). When the house is sold, the principle value returns to the seller via the sale and remaining loan payoff. So when you are paying off, say, $1,000 a month, if $600 is principle and $400 is interest, your true (final, after-the-sale-returns-principle-to-you) payment is $400. If you lower the total to $900 a month, but it breaks down as $400 principle and $500 interest, the true payment is $500.

So again, debt trap.

I looked it up and France is 20 as the most common with generally up to 25. Spain is 20 average with 25-30 and max of 40. Italy, Germany and even the UK are in that range with UK being the longest now with 31-32 capping out at 40 generally. 50 is not normal for comparable countries. Are you suggesting that in your country 50 is normal?