Bestselling Author Warns About the Rise of 50 Year Mortgages

One of the most successful and sought-after financial advisors in the country, Erik Weir took the insights and tools he uses and put them into the book “Who’s Eating Your Pie? a guidebook to what you need to grow a bigger, sweeter financial pie than you ever thought possible – and how to keep everyone else’s fingers out of it!

The White House says it is considering backing a 50-year mortgage to help alleviate the home affordability crisis in the country. But the announcement drew immediate criticism from policymakers, social media and economists, who said a 50-year mortgage would do little to resolve other core problems in the housing market, such as a lack of supply and high interest rates.

Bill Pulte, director of the Federal Housing Finance Agency, said on X over the weekend that a 50-year mortgage would be “a complete game changer” for homebuyers. FHFA is the part of the federal government that oversees Fannie Mae and Freddie Mac, which buy and insure the vast majority of mortgages in the country.

The 30-year mortgage is a uniquely American financial product and the default way to buy a home since the New Deal. Politicians and policymakers at the time wanted to create a standardized mortgage that borrowers could afford and pay off during their working years, when the average lifespan for an American was 66 years old.

Lower payment

Extending the life of a mortgage to 50 years does decrease a borrower’s monthly payment.

The average selling price of a home in the U.S. was $415,200 in September, according to National Association of Realtors. Assuming a standard 10% down payment and an average interest rate of 6.17%, the monthly payment on a 30-year mortgage would be $2,288 while the payment on a 50-year mortgage would be $2,022. That’s presuming a bank would not require a higher interest rate on a 50-year mortgage, due to the longer duration of the loan.

But significantly higher interest

Because even more of the monthly payment on a 50-year mortgage would go toward interest on the loan, it would take 30 years before a borrower would accumulate $100,000 in equity, not including home price appreciation and the down payment. That’s compared to 12-13 years to accumulate $100,000 in equity when paying off a 30-year mortgage, excluding the down payment.

A borrower would pay, roughly, an additional $389,000 in interest over the life of a 50-year mortgage compared to a 30-year mortgage, according to an AP analysis.

BIO: Erik Weir, author of Who’s Eating Your Pie?: Essential Financial Advice that Will Transform Your Life [4], is the principal of WCM Global Wealth LLC, a wealth advisory firm that serves clients from the biggest multi-Platinum & Grammy-winning recording artists, celebrities, sports icons, and international clothing designers, to families listed on the Forbes billionaires list and other notable business owners.

As an investor, Weir has partnered in the development of five Topgolf locations in the US and 20 upcoming locations across Europe. Weir is also a previous owner of WTA Media, a leader in film marketing, finance, and literary representation, and has served as executive producer for films including Unbroken: Path to Redemption and Run the Race (produced by Tim Tebow)

An expert on wealth-building, entrepreneurism, goal setting, real estate investment, money management, marketing, and promotion, Weir speaks to major corporations across the country each year. He is a life-long student who has earned degrees and certificates from Harvard University and Georgia State University. He is a father of 5 sons and splits his time between Charleston and Greenville, South Carolina.

Learn more at https://erikweir.com/.