Trump’s 50-year mortgage makes sense

 Why Trump’s 50-year mortgage makes sense

• Trump's 50-year mortgage makes a lot of sense based on the numbers

• It would be a boon to first-time buyers of owner-occupied homes

• Critics chastised the “50-year mortgage” based on TDS and an intentional focus on bad assumptions (only a critic or an idiot would keep a 50-year mortgage to pay off, if alternatives are available)

The numbers below were worked out by ChatGPT (no expert required)

Using this example, at the outset, a payment difference of ~$150/mo could easily be, for a first-time homebuyer, the difference between being able to buy and not. 

Presuming that the buyer’s age, work experience, economic circumstances improve in a period of two years, the borrower may be financially able to increase the payment with no penalty and be able to go to a mortgage that they could not afford two years prior.

In addition, if mortgage interest rates decline, there is the option to refinance at lower rates, with the benefit of a track record of timely payments.

The more expensive the home, the more advantage there is in the strategy.

The one risk outside this analysis is a decline or collapse of the real estate market. This is a home-buying strategy, not an investment strategy recommendation.

A pipe dream? No, it always was the American Dream (my dream in 1976 with mortgage rates at 9%).

Here’s a clear comparison table showing the three mortgage strategies you've asked about, all based on:

• Home price: $350,000
  
  

• Down payment: 5% ($17,500)
  
  

• Loan amount: $332,500
  
  

• Interest rate: 6.5%
  
  

• 30-year standard payment: $2,102.56/month
  
  

• 50-year standard payment: $1,949.02/month
  
  

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📊 Mortgage Strategy Comparison

Strategy	Monthly Payment	Total Paid	Total Interest	Principal Paid After 24 Months	Remaining Balance After 24 Months	Notes
1️⃣ 30-year held to maturity	$2,102.56	$756,921.60	$424,421.60	~$11,875	~$320,625	Most efficient option
2️⃣ 50-year held to maturity	$1,949.02	$1,169,412.00	$836,912.00	~$3,531	~$328,969	More than double the interest
3️⃣ 50-year, then pay 30-year amount after 24 months	$1,949.02 first 24 months, then $2,102.56	$803,698.08	$471,198.08	~$3,531	~$328,969 → paid off on 30-year schedule	Flexible payments, higher interest than Strategy 1

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🔍 Key Takeaways

Insight	Impact
🔸 Strategy 2 costs $412,490 MORE in interest versus Strategy 1 (it would be foolish to stick with it for 50 years).
🔸 Strategy 3 (accelerate after 24 months) still costs $46,777 more in interest than starting with a 30-year loan.
🔸 In the first 2 years, the 50-year loan builds $8,344 less equity than the 30-year loan.
👍 Strategy 3 gives payment flexibility early with long-term savings versus Strategy 2.
🚫 Strategy 3 never beats starting with the 30-year mortgage financially, but it beats staying a renter forever.

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📈 Visual Snapshot

Interest Paid (Least → Worst)

30-year only          $424K  ✔️ Best

50 → 30 at 24 months  $471K  ❗ +$47K

50-year only          $837K  🚨 +$413K

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🧠 Final Recommendations

✔ If possible, start with a 30-year mortgage from day one.
✔ If short-term cash flow is critical, Strategy 3 is a reasonable compromise, but switch as early as possible (don’t wait 2 full years if not necessary).
🚫 Avoid Strategy 2 unless absolutely unavoidable for qualification reasons.

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