Could a fifty-year mortgage make buying a home easier in Missouri?
President Trump has proposed the idea to lower monthly payments, but Jeff Jones, Associate Dean at the College of Business at Missouri State University told Missourinet that people would be paying a tremendous amount of interest.
Jeffrey Jones Associate Dean with College of Business at Missouri State University. Photo courtesy of Missouri State University.
“It’s an even greater piece of that payment that is dedicated towards paying interest, said Jones. “So, for me that is the biggest concern with a 50-year mortgage would be the fact that homeowners might pay on that loan for many, many years and really build very little equity in the home.”
Jones told Missourinet that his sense is this proposal will not come to fruition.
“My opinion on this particular proposal is that it’s not a great proposal,” said Jones. “I don’t believe it’s really in the best interest of homeowners in the long term. Could it potentially allow certain couples or individuals to be able to afford a home that they couldn’t otherwise? Yes, that’s true.”
According to National Association of Realtors Chief Economist Dr. Lawrence Yun, while a 50-year mortgage may slightly ease monthly payments, it comes at the cost of slow equity growth and significantly higher interest—underscoring that the real affordability challenge lies in the lack of homes, not the length of the loan.
“If it’s something that made sense, right, I think the private market would have already developed such a product,” said Jones. “There was a time when even the 30-year mortgage was considered….’Ohh, you know, is this really a feasible product…. all that kind of stuff.” And you know, we’ve seen that it has been, but I really questioned whether or not a 50-year mortgage is in the interest of homeowners.”
The Missouri Relators Association has not weighed in on the issue yet.
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