You have probably seen the headlines about Trump floating the idea of a possible 50-year mortgage. The idea is simple. Stretch the loan payoff period to lower the monthly payment. In a market like San Diego where prices are high, that sounds tempting. But what would it actually mean for you as a buyer here?
Let’s break it down in plain English, keep it practical, and talk through the pros and cons so you can decide if it could ever make sense for your situation.
First, what is being discussed?
Right now, most purchase loans are set up to be paid off over 30 years. A 50-year mortgage would extend that timeline by two more decades. Your payment could go down because you are spreading the same principal over more months. Think of it like slicing a pizza into more pieces. Each slice is smaller.
That said, the details matter. Programs would need to be approved. Lenders would need to offer it. It would take time for any new option to show up widely. So consider this a possibility to track, not something you can lock today.
How much would payments drop?
Less than many people expect. If you keep the same loan amount and the same rate, the payment reduction from 30 to 50 years is real, but it is not a silver bullet. Depending on the terms and the size of the loan, a 50-year mortgage could reduce your loan payments by approx 10%. But at the same time, this extends the life of the loan by almost DOUBLE.
While for some buyers, a few hundred dollars a month can be the difference between qualifying and not qualifying. For others, it may not move the needle enough to change the decision.
If you want, I can run side by side numbers for your price point so you can see the difference clearly.
The tradeoff you need to see
Lower monthly payment sounds great. The tradeoff is total interest and slower equity build. When you stretch a loan for 20 more years, you pay interest for 20 more years. Over time, that adds up. A lot.
You also pay down principal more slowly. That means your equity grows at a slower pace, especially in the early years. If you plan to sell or refinance in a few years, you may have less equity than you would have with a shorter term.
Pros for San Diego buyers
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Lower monthly payment. A smaller payment can help with qualifying and can free up cash for other goals like savings or childcare.
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More flexibility. If you expect your income to rise or plan to make extra principal payments later, a longer term can be a short term cash flow tool.
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Another option in a tight market. When prices feel out of reach, having one more financing lever to pull can open a door for a few more buyers.
Cons to keep top of mind
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Much higher total interest over time. Spreading payments over 50 years means you pay the lender for a longer period. Almost double the amount of time.
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Slower equity growth. If the market cools or stays flat, you may not build equity as quickly as you would like.
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Carrying debt into retirement. Many buyers would still have a mortgage in their 60s or 70s unless they switch terms or prepay.
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Not a fix for housing supply. Affordability in San Diego depends a lot on inventory. A longer term does not create more homes to buy.
How could this change your strategy?
If you are buying soon. Keep your focus on what is available today. Compare a standard 30-year loan with strategies that already work in our market. Seller credits for rate buydowns. Temporary buydowns. Points to lower your rate. Assumable loans when available. These can reduce your payment without locking you into a five-decade schedule.
If a 50-year option becomes available later. Treat it like a cash flow tool, not a forever plan. If the monthly savings help you get into a home you love, set a plan to make small extra principal payments or refinance into a shorter term when rates improve. Even an extra $100 to $300 dollars a month toward principal can meaningfully shorten the timeline.
If you are thinking long term. Ask yourself a few questions:
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How long do I plan to live in this home?
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Do I expect my income to grow in the next three to five years?
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Would I actually make extra payments once my budget loosens up?
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How important is it for me to be mortgage free before retirement?
Your answers will point you toward the best path.
A quick example mindset
Imagine the 50-year mortgage trims your monthly payment by a couple hundred dollars compared to a 30-year loan. That might get you in the door. Great. Now decide in advance how you will use the savings. Will you pay extra principal each month. Will you keep a cushion for repairs and emergencies, then apply lump sums a few times a year. Will you refinance when the numbers make sense. Having a plan turns a long-term loan into a stepping stone.
Bottom line for San Diego buyers
A 50-year mortgage could help a slice of buyers qualify, but it is not a cure for affordability. The real cost shows up in total interest and slower equity. If this product appears, look at it next to your other options and make the choice that fits your life, not just the lowest monthly number.
Curious what this would look like for your budget and neighborhood. I am happy to run a quick side by side comparison for you. We could map your monthly payment, total interest, and equity path for a 30-year, a 40-year where applicable, and a 50-year. Then you can move forward with confidence.
Any other questions? Call or text me at 858-335-4597. I'd be happy to help.
Until next week's edition of San Diego Housing Market Mondays.
