11/14/2025
Not my post, copied and pasted but very relevant!
This 50 year mortgage talk is doing one thing:
Identifying mortgage and real estate professionals that don’t know about the mortgage market/Capital Markets.
I’ve seen so many payment comparisons this weekend… and most of them make me sick.
Why?
Everyone is using the same rate for both options!
And that should throw up a red flag for anyone dealing with these mortgage professionals.
Fun Fact:
FNMA actually purchased 40 year mortgages between 2005 and 2013 (maybe 2014), so this is nothing new… and the 40 year rate was always higher.
Always.
So, let’s fix your math.
Currently, the rate spread between 15 and 30 year fixed mortgages is 0.72% (based on FHLMC survey rates).
It would be a fair assumption that the spread between 30 and 50 years would be similar.
To make math easy, I’ll round to the nearest eighth.
Current FHLMC Survey Rates:
- 15 year: 5.50%
- 30 year: 6.25% (actually 6.22%)
- 50 year: 7.00% (projected)
The U.S. median home price in Q2 was $410,800.
Again, for simple math, let’s use a $400k loan amount.
$400,000 @ 5.50% for 15 years:
$3,268/month P&I
$188,300 interest paid
$400,000 @ 6.25% for 30 years:
$2,462/month P&I
$486,632 interest paid
$400,000 @ 7.00% for 50 years:
$2,406/month P&I
$1,044,052 interest paid
No politics here… just good ol’ math.
Pay for 20 more years,
More than double the interest,
To save $56/month.
Now you show me one single mortgage professional who would propose this as a savvy financial decision.
Because I don’t know one.
