Trump floats 50-year mortgages. Could that make Long Island homes more affordable?

A proposal from President Donald Trump to back a 50-year mortgage option could offer Long Island homebuyers a chance at lower monthly payments, but a closer look at the mortgage math shows borrowers could be saddled with hundreds of thousands in interest costs for a minimal benefit. 

Under a 50-year mortgage, borrowers would accumulate equity slowly and the new option isn't likely to address broader home affordability issues on Long Island, lenders and mortgage brokers said.

Rising home prices and elevated mortgage rates have driven up the cost of homeownership for Long Islanders in the years since the COVID-19 pandemic and pushed homebuying out of reach for some would-be buyers. The median price of a home on Long Island, excluding the East End, was $750,000 in the third quarter. 

In that environment, a new loan type that lowers monthly costs could be attractive, particularly to first-time buyers who often put less than 20% as a  down payment and might not otherwise be able to afford a home, said Linda Bell, a home lending expert at Bankrate.

But borrowers should also consider the massive amount of interest they would have to pay and how slowly they would build equity, she said. That's because the majority of mortgage payments for years would go toward interest costs and not significantly reduce the amount owed. 

"It's like you're running in place," Bell said. 

Granted, most homeowners don’t keep their mortgage for decades. The average homeowner in the metropolitan area stays in their home about 15 years, according to Redfin. Many refinance their loans even earlier.

But while homeowners might not keep the 50-year loans for decades, they still would accumulate equity in their homes at a far slower pace than with 30-year fixed loans, Bell said.

That largely diminishes the value of homeownership to create wealth that can be passed to future generations, Bell said. 

"That concerns me with the whole generational wealth-building conversation," Bell said. "If you're not building equity, you're not passing on wealth to your children."  

Larry Matarasso, a senior loan officer at Green River Capital in Plainview, described the proposal as a gimmick and questioned whether it would come to fruition.

“It’s a bad idea when you compare it to a 30-year fixed rate,” he said. “What am I as a borrower getting for the risk I run of paying many thousands of dollars more in interest?”

Matarasso crunched the numbers on one potential scenario, which Newsday confirmed through an online mortgage calculator. On a $500,000 loan at a fixed rate of 6%, a homebuyer would pay about $2,998 a month. Over 30 years, they would pay about $579,000 in interest.

Matarasso and other mortgage experts interviewed by Newsday said they expect a 50-year loan would require a higher rate. At 6.75%, a rate Matarasso said was plausible, a buyer’s monthly payment would drop about $85 to $2,913.

But that homeowner would pay more than $1.2 million in interest over the 50-year loan.

"That wouldn't be enough of an incentive," Matarasso said of the potential $85 savings.

The equation could change if lenders offered the longer-term loans at the same rate as a 30-year mortgage, but that isn't likely without government subsidy, Matarasso said. 

The 50-year loans would also fail to address many factors driving up the cost of homeownership, including a shortage of houses for sale and the rising cost of property taxes and insurance, said Guy Cecala, executive chair of trade publication Inside Mortgage Finance in Bethesda, Maryland. 

“What makes mortgages hard to afford throughout most of the country, particularly on Long Island, in New York, New Jersey and other high-cost states, is the property taxes and all the other charges are too high,” he said.

Even if lenders offer the new loans, they will still need interested borrowers. Geralyn Cappellino, of West Babylon, said the 50-year loans deprive middle-class homebuyers of their ability to gain equity in their homes.

"You’re going to be 70 years old and still paying off your home," she said Tuesday outside Stew Leonard's in Farmingdale. "That’s ridiculous."

Nick Miller, 28, said he would like to buy a home on Long Island but expects to continue renting next year when he moves in with his girlfriend, leaving the Long Beach apartment where he lives with two roommates.

The potential 50-year loan option won't change that decision for him. The idea of assuming the costs of homeownership from a landlord while accumulating equity very slowly isn't enticing, he said. ​​​​​​

"It doesn't seem like that much better of a solution than renting," he said.

How would a 50-year mortgage work? 

Trump spurred discussions of 50-year mortgages when he posted an image on Truth Social titled, “Great American Presidents” that showed a portrait of President Franklin D. Roosevelt below the words “30-year mortgage” and Trump below the phrase “50-year mortgage.”

Bill Pulte, director of U.S. federal housing who oversees mortgage giants Fannie Mae and Freddie Mac, responded on X, “Thanks to President Trump, we are indeed working on the 50-year mortgage – a complete game changer.”

The federal government could encourage lenders to offer 50-year mortgages if Fannie Mae and Freddie Mac were allowed to purchase such mortgages. In 2014, federal regulators barred the giant mortgage purchasers from purchasing certain types of mortgages, including those with terms longer than 30 years, as well as interest-only home loans.

Fannie and Freddie play a critical role in housing finance, purchasing mortgages from lenders and packaging some into mortgage-backed securities. That helps raise money for future home loans, making homebuying more affordable. 

It remains to be seen whether lenders, borrowers and investors would flock to the 50-year option, Cecala said, but potential solutions to address home affordability are worth discussion. 

"You've got to talk about something because the status quo isn't moving the needle right now," he said. 

Long Island lenders said they are open to offering 50-year fixed mortgages if Fannie Mae and Freddie Mac approve a plan to buy those loans. But they would want to educate consumers on the tradeoffs of the new loans. The longer-term loans make the most sense in high-price markets, such as New York and California, where buyers struggle to afford monthly payments, said Casey Mauldin, chief lending officer at Jovia Financial Credit Union in Westbury. 

Mauldin said his biggest concern is a sharp housing downturn in which the value of borrowers' homes dropped below the amount they owe.

"If valuations drop considerably, especially faster than the principal paydown on that 50-year loan, it could be a recipe for disaster," he said. ​​​​​​

Zahra Jafri, founder and president of Lynx Mortgage Bank in Westbury, said the lender would offer a future 50-year mortgage but would educate consumers on the additional interest costs. But if the rates were much higher than 30-year loans, borrowers might see little to no savings in their monthly payments. 

"The interest rate will be higher, so the whole benefit could be washed out," she said. 

​​​​Newsday's Virginia Huie contributed to this story.​​​​​​