Investor Kevin O’Leary is pushing back against President Donald Trump’s plans for a 50-year mortgage, warning that it would deepen the country's housing affordability crisis rather than solve it.
Calls It A ‘Bad Policy’
According to O'Leary, the underlying issue isn't creative loan structures but the end of an era in which Americans grew accustomed to unusually cheap borrowing.
For “almost 22 years,” he noted, mortgage rates were extraordinarily low at 3.8% to 4.5%, when they historically stood at between 5.5% to 7.5%, going as high as 17.5% during certain periods, while appearing on Fox Business’ “The Bottom Line” on Wednesday.
O’Leary said that with inflation still at 3%, it will be hard for the Federal Reserve to lower rates further, making long-term affordability a structural challenge. He warned that Trump’s 50-year mortgage plan only extends this problem rather than fixing it.
He said that such a mortgage plan ignores basic financial realities for most Americans. For many Americans purchasing their first home around age 40, the math simply doesn't work. “You will be dead before the mortgage [is] paid off, you will never own the house.”
O’Leary warned that the long-term financial consequences are even steeper than most buyers assume, as they would end up paying a significant amount in interest, just to save “$200 a month.” In his view, the plan amounts to “bad policy.”
You ‘Save Almost Nothing’
Economist Justin Wolfers echoed similar concerns, noting that the interest rate on a 50-year mortgage would be at least “half [a] percent or even one percent higher than it would be under 30,” which he said would result in very small savings.
“So you save almost nothing on the monthly mortgage and you have to pay for another 20 years,” Wolfers said, highlighting the impracticality of the plan.
Trump’s plan has since received pushback from within his own party, with Rep. Marjorie Taylor Greene (R-Ga.) opposing it, saying, “I don’t like 50-year mortgages as the solution to the housing affordability crisis … In debt forever, in debt for life,” in a post on X.
Greene suggested other options to deal with the crisis, such as stopping large corporations from buying single-family homes and eliminating capital gains taxes on the sale of primary homes.
“This will help people keep the equity they have earned owning their home for a very long time and likely allow them to lower the price of their home for sale since they won’t be paying taxes after they sell their home,” she said.
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