Danilo Bogdanovic, REALTOR(r)

11/15/2025

Is the 50 year mortgage a good or bad thing?

As you may already know, there is talk about doing a 50 year mortgage to help make housing more affordable. Some of you have reached out asking me for details and what I think about it.

Here's the CliffsNotes/X style answer...

1. It's a wolf in sheep's clothing. It looks good at first glance, but it's bad for homebuyers/consumers in pretty much every other way.

2. I think it's one of the dumbest real estate related ideas I've heard in my 21 year career. We shouldn't be using additional consumer debt to try to get out of the housing affordability problem.
And here’s why I say that...

Let's start with the actual numbers and what they mean for homebuyers and homeowners.

First of all, the longer the term of the loan, typically the higher the interest rate. A 15 year mortgage has a lower interest rate than a 30 year mortgage. The same principle would apply to a 50 year mortgage.

I've heard folks guessing as to how much higher the interest for the 50 year mortgage may be. Most are guessing it would be at least .5% higher, but less than 1% higher.

That's for two reasons.

The first reason is that the average difference between a 15 year and 30 year fixed rate conventional mortgage is between .6% and .75% and using a similar formula leads to a similar difference.

The second reason is that a .5% higher rate on a 50 year mortgage provides the homeowner with a savings on their monthly payment while a 1% higher rate actually makes the monthly payment higher.

At the end of the day, the banks are going to want to see a higher rate to reflect the longer term of the loan, but the rate can't be so high that it becomes more expensive for consumers per month.

The first chart below shows the actual monthly payment difference of a 50 year mortgage at both a .5% and 1% higher rate using a 10% down payment at three different purchase prices - $300K, $600K and $900K.

As you can see, at .5% of a higher rate, home buyers will have a lower monthly payment than with a 30 year mortgage. But, at 1%, they will have a higher monthly payment.

So a 50 year mortgage at a .5% higher rate is better for consumers and should lead to more people buying homes…right?

Right?!

Not so fast. Let's take a look at the entire picture and the fine print below it.

Besides a lower monthly mortgage payment, a .5% higher rate on a 50 year mortgage also means the following,

- Additional interest (a LOT of it). Even at a .5% higher interest rate, the total interest is more than double that of a 30 year mortgage. Just the additional interest of a 50 year mortgage over a 30 year mortgage is hundreds of thousands if not well over a million dollars.
- Much slower equity and wealth creation. An even higher percentage of your monthly payment goes toward interest meaning that it will take you about twice as long to build the same amount of equity (and wealth) with a 50 year mortgage than a 30 year mortgage (see second chart below).

- With equity being built at a much slower pace, there's a much higher chance of becoming "upside down" if there's a turn in the market. And being "upside down" is not a good thing for homeowners with many that are "upside down" simply handing in their keys even if they could make the monthly payments (remember all of the "strategic" foreclosures during the GFC/Great Recession 2007-2010?).

In addition to the three disadvantages I noted above, there are several other direct and indirect disadvantages to a 50 year mortgage. Those are related to potential emergency funds, wealth creation, retirement funds, potential emergency funds, and others. But I'll leave that to your financial planner (or AI) to explain as I am neither a financial planner nor an accountant.

At the end of the day, the 50 year mortgage does more for increasing consumer debt and eroding consumer wealth while producing more profit for banks and lenders than it does for making housing more affordable. In fact, I would argue it has very little to nothing to do with making housing more affordable.

I would love to hear what your thoghts about a 50 year mortgage. And if I missed something, please let me know. I'm always happy to chat over the phone or over a cup of coffee.

Daniloheb

08/20/2025

*** NoVA housing market update - August 20, 2025 ***

The local housing market in NoVA/the DMV has been quite interesting this month and includes a shift in market conditions.

August is normally one of the two slowest months of the year when it comes to real estate in the DMV. This is due to what is typically a drop in buyer demand in July and an even greater drop in August. But this August has been quite busier than usual.

Buyer demand is up this month over July. That can be seen and felt in the number of online views of property listings and an increase in the average number of in-person property showings/tours.

The increase is mainly due to affordabilty and buyer sentiment, which stems primarily from these three things,

1. Mortgage rates dropped around the beginning of the month.

2. Local housing prices are down overall since the peak about two months ago. The DMV is one of the last remaining areas in the U.S. to still show YoY increases in prices, but that may likely change in the coming months.

3. The market has shifted from the seller's market to a balanced market giving buyers more leverage, and in turn greater confidence and comfort.

There are always two sides to the coin. While buyers are breathing a sigh of (some) relief, sellers are wishing they were doing 88mph in a Delorean with thunder and lightning above.

Remember though, if you're both selling and buying in the same market, it typically comes out in the wash. What you love as a buyer, you don't like as a seller, and vice versa.

One thing of note... The luxury and higher priced property market has been doing better than the rest of the market for some time now. It's showing some cracks in it, but not as many.

Will the luxury and higher priced property market eventually follow the rest of the market? Most likely yes, but no way to be certain as to when. Time will tell.

As always, feel free to reach out to me with any questions or just to chat.

Have a great week!

04/11/2025

This comes days after some brokerage firms announced they’re starting their own private listing networks.

This is going to get really interesting.

If a listing is marketed to any home shoppers, it should be marketed to all home shoppers. [...]Read More...

03/18/2025

There has been a lot of recent press and talk about how the government layoffs and cuts in general will or are affecting the housing market. Many if not most of what has been written and said is partially if not totally false.

The truth is that the dust has yet to settle and the true impact, if any, won't be felt for some time. Until such time, the only thing anyone can say with certainty is what has and is currently happening backed by factual, up to date data.

That data can be found via a few sources with the regional MLS, BrightMLS being the most accurate and up to date source for housing market data in the mid-Atlantic region, which it serves and operates within.

Due to all the false information out there, BrightMLS decided to make it easier to set the record straight by publishing a weekly market report with the latest data and trends regarding the local housing market.

This report comes out every Tuesday and covers the previous week with the most recent report coming out this morning. If you would like a free copy of the report, send me a message.

The report and the data confirm what is being felt by those actively involved in the market (agents with active clients and homes under contract, active home buyers and home sellers with their home under contract or sold in the past 45 days or so).

To sum up what is actually happening in the NoVA housing market,

- No, the proverbial sky is not falling.

- Yes, inventory is rising. But it usually does this time of year due to seasonality and we are still far below normal inventory levels and still need more inventory to offset the amount of buyer demand in the current local market.

- Yes, buyer demand is increasing due to both seasonality and mortgage rates having dropped down to some of the lowest levels in months.

- Yes, some people have lost their jobs or worried about losing their jobs. Have any of them decided to sell their home because they lost their job? None of my personal clients have/are. And none of the agents I've spoken with about this have a seller client who is selling because they lost their job.

- On the flip side, there are folks who are scrambling to move back and buy a home in this area because of the RTO (Return To Office) mandate. Several of the agents I've spoken with about this, as well as I, have at least one client who is in this situation.

- Yes, places like Florida have a housing market that has already seen values decrease substantially. But we're not Florida and our market is healthy and strong up to and at this moment.

- Real estate is local. Though some things such as mortgage rates and the general US economy help drive the housing market in general, each local and hyper-local housing market is its own living and breathing entity that has its own characteristics and personality.

- The main two driving factors for real estate are supply and demand (mortgage rates directly affect demand). Inventory in the DMV is still well below normal levels and not enough to cover the current buyer demand.

- The current market is seeing multiple offers and price escalations on a pretty significant amount of homes in NoVA and the DMV in general.

- Can this change? Yes, of course it can and most likely will. As the saying goes, the only constant is change. And that holds true in real estate. There are major cycles in real estate and smaller cycles within those.

Feel free to reach out anytime with questions about the general market, your hyper-local market, your home's market value or anything else real estate related. I'm happy to chat and answer your questions anytime.

03/18/2025

Good read about how the demographics within housing/real estate have changed and continue to change, and some of the effects of those changes.

"The American Dream has changed."

02/15/2025

Not good news for home buyers. Affordability is already at or near all time lows.

The ABC warned that strong contractor demand and threats of further tariffs could cause prices to rise further this year.

02/14/2025

According to a recent poll, 29% of all real estate agents sold all of the homes in the US in 2024 while 71% of real estate agents didn’t even sell one.

At Inman Connect New York, Redfin's Joe Rath broke down the views of active agents in the industry, who make up less than a third of all Realtors.

01/10/2025

The latest data doesn’t bode well for the housing market. Rates react by continuing their upward trend and making a new near term high. Here are the six and one month charts…

11/20/2024

Arlington County, VA and Loudoun County, VA ranked #1 and #2 safest counties in the U.S. and Fairfax County, VA came in #8.

Across the Potomac from the capital is a county of high-rise apartment buildings and extremely low traffic-fatality and homicide rates.

10/25/2024

My clients and I were thrilled to have received four written offers and several verbal offers, and to sell this beautiful property for $100,000 over asking price. And the icing on the cake was that there were zero contingencies. This is the power of having the right professional and their team guiding you and representing your best interests.

A huge thank you to all of the people and vendors involved in getting the property ready for sale and getting us to the finish line. And a special thank you to Step Above Staging for the amazing job staging the property and doing so on such short notice.

(BRIGHT MLS) For Sale: 6 beds, 6.5 baths ∙ 7208 sq. ft. ∙ 9915 Mill Run Dr, Great Falls, VA 22066 ∙ $2,350,000 ∙ MLS # VAFX2202078 ∙ Coming Soon: * * * Open House this Saturday, September 21st between 11am a...

09/17/2024

I'm going to start featuring one of my listings on various social media channels on a semi-regular basis. This time around, it's my newest listing, and it's a beauty! This amazing 5-year young, 7,208 square foot custom built property in Great Falls embodies modern elegance and functionality. Every square foot has been carefully considered and thought out.

For photos, a 3D virtual tour, floor plan and custom property video, check out the property listing online.

To see this amazing property in person, stop by the Open House this Saturday the 21st from 11am-2pm or contact me directly to arrange a private tour.

(BRIGHT MLS) For Sale: 6 beds, 6.5 baths ∙ 7208 sq. ft. ∙ 9915 Mill Run Dr, Great Falls, VA 22066 ∙ $2,350,000 ∙ MLS # VAFX2202078 ∙ Coming Soon: * * * Open House this Saturday, September 21st between 11am a...