One market shift from ‘underwater’: Credit expert uncovers the real risks of 50-year mortgages

When the Trump administration floated the idea of a 50-year mortgage, credit solutions expert Micah Smith didn’t mince words.

“I was mortified,” she told Fox News Digital. 

On paper, stretching a home loan over half a century promises lower monthly payments. In reality, Smith warns, it could trap millions of Americans — especially retirees and first-time buyers — in what she calls a “risky” deal that’s “one market shift away from being completely and totally underwater.”

“My fear is that the 50-year mortgage is going to attract the unsavvy consumer, and someone who doesn’t understand how finances work and how interest works,” Smith said. “If you are in a 50-year mortgage, it’s going to take you four times as long to build the equity in the home.”

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“It’s going to attract a consumer that’s already struggling,” she added. “There’s going to be an even larger disparity, once again, between the wealthy and the poor. And I think the disparity is going to get even bigger with this 50-year mortgage.”

In early November, President Donald Trump and administration officials signaled plans to develop a 50-year mortgage they believe could expand access to homeownership. Trump posted on Truth Social with a graphic showing “Great American Presidents,” including Franklin D. Roosevelt, whose New Deal housing reforms helped pave the way for the modern 30-year mortgage, and himself, suggesting he will develop a 50-year version.

Federal Housing Finance Agency Director Bill Pulte added in a post on X that, “Thanks to President Trump, we are indeed working on The 50 year Mortgage – a complete game changer.”

Under current rules, mortgages longer than 30 years generally do not qualify as “Qualified Mortgages” under the CFPB’s Ability-to-Repay rule, and FHA and GSEs currently allow 40-year terms only for loan modifications.

A UBS analysis found that a 50-year mortgage results in total interest payments equal to roughly 225% of the home’s price – more than twice the level under a 30-year loan. UBS also noted that with a 50-year term, borrowers would have paid down only about 11% of the principal after 20 years, highlighting how slowly equity builds over such an extended period.

“The people that are going to be helped are going to be the people who have a plan… a substantial plan for higher income coming down the line,” Smith said, noting that those hurt most could be first-time homebuyers, retirees and even military families.

“My concern is definitely going to be for the older generations, the people who are already struggling, maybe living off of Social Security… If they don’t have the ability to even fix the home that they have that they don’t own, that is extremely concerning,” she explained. “I think also for people who are perhaps in the military, I think that would also be a very scary situation because they have no ability to really build any equity whatsoever.”

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“We’re already talking about first-time homebuyers in the younger generation, Generation Z, who’s coming in with a lower credit score. So if they’re jumping in at these 50-year mortgages, and they’re not coming in even at premium tiers, that’s a really scary thing,” Smith continued.

The White House did not immediately respond to Fox News Digital’s request for comment.

Asked how a 50-year mortgage might change the way she coaches clients on budgeting, emergency funds or home maintenance, Smith emphasized saving as much as possible before buying.

“If you are budgeting now, you’re gonna have to get even better at budgeting,” Smith said. “You need to be setting aside money for a rainy day… If you can just put a little bit away, a little bit away, because again, that compounding interest is critical for wealth over a significant amount of time. And as of right now, we have not had any consumers ask us about the 50-year mortgage.”

“If you are sitting here, and you are one market correction away from being underwater, I mean, that’s the biggest thing that really scares me.”

– Micah Smith

“However, I do teach realtors, investors, brokers all over the country, and they’re the ones right now who [are] actually the most appalled by it,” she claimed. “I have not heard one positive remark from one real estate agent yet… I think [there is] more of a positive response from some of the mortgage lenders, but we have to understand the narrative is going to be different depending on the motive.”

Agreeing that a 50-year mortgage sounds like a lifetime commitment, Smith cautioned against a culture of instant gratification and the loss of long-term thinking.

“We live in a microwave society, and a lot of people fail to think about the long-term and I think that’s what gets a lot of us in trouble… The mortgage is supposed to be something where it’s like, you get it, you buy it, you pay it off, you own something.”

“You have to look at the long-term picture if you want to be successful,” she said. “[The 50-year mortgage] really is a recipe for disaster in the long run.”

When asked for one word to describe the idea as a whole, Smith didn’t hesitate: “Risky.”

“You have to do the math. You have to do the numbers. And again, you are one market shift away from being completely and totally underwater. So I think the best word for it is absolutely risky.”

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FOX Business’ Eric Revell contributed to this report.