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December, 2025
A New 50-Year Mortgage Could Be In The Works.
Recently, President Trump floated the idea of a 50-year mortgage as a way to improve housing affordability and put new life in a deeply stuck market. Over the past five years, housing prices in many areas have doubled. And with mortgage rates still ranging in the low to mid 6’s, perspective home buyers are finding themselves locked out of the market. And we are seeing this in the average age of first-time home buyers. Last year, the average age climbed to a record high of 40 years old, according to the National Association of Realtors, up sharply from 33 years old just five years ago.
A 50-year mortgage could lower the monthly cost of buying a home and help buyers currently priced out of the market. For example, take a $415,000 home, which is around the median price in the US. If a buyer put 20 percent down, and received todays average 30-year rate of 6.22 percent over 30 years, a buyer would be paying $2,038 per month in principal and interest. With a 50-year mortgage with the same rate, a buyer’s monthly payment would drop to $1,802 per month. That is a monthly savings of $236 per month. That could very well entice a first-time home buyer.
However, there is a downside to this monthly savings. With this extended time horizon, homeowners will build equity much more slowly. In addition, the buyer would be paying significantly more in interest if they remained in the home for the duration of the mortgage. Extending the example above, with a 30-year mortgage, a homeowner would pay roughly $734,000 with $402,000 going to interest. With a 50-year mortgage, total payments would rise to $1.08 million, with $749,000 going to interest. And this does not take into account the probability that the interest rate on a 50-year mortgage would be higher since a 50-year loan does carry a higher risk of default. In addition, if more home buyers enter the market to take advantage of the monthly savings of a 50-year mortgage, it could increase competition for homes, and increase the price of homes.
Even with its drawbacks, a 50-year mortgage does have its proponents. They often argue, how many buyers actually stay in their home for the duration of a mortgage? According to the National Association of Realtors, 20 percent of all purchasers move within five years of buying. For first-time homebuyer, the stay is slightly longer at 6-8 years. So, many view a 50-year mortgage as a short term avenue to get into the market, and then refinance later when moving, or just in a better financial position.
Although the administration has proposed the idea of a 50-year mortgage, it is a long way from a done deal. Currently, under the Dodd-Frank Act, passed after the 2008 housing crisis, mortgages that exceed 30-years do not meet the definition of a qualified mortgage, which then means Fannie and Freddie Mac cannot buy them. Without that security, lenders are unlikely to originate 50-year mortgages. And right now there is no legislation that would change this.
Market Watch will continue watching for any developments, and report any news.
Experts Predict Mortgage Rates Will Ease In 2026
The big question on home buyer’s mind is, will mortgage rates continue to go down next year? And that is a fair question considering the banter regarding the Federal Reserve decreasing their federal fund rate in 2026. Remember, the Fed decreased their rate by a quarter point in September, targeting a range of 4.0 to 4.25 percent. Currently, 30-year mortgage rates have not decreased proportionately and are hovering between 6.30 and 6.36 percent according to Mortgage News Daily.
Most watch the Federal Reserve’s rate to sense what mortgage rates will do. But readers of Market Watch have been guided to watch the 10-year treasury yield to measure mortgage expectations.
For over 50 years, the 30-year mortgage rate has closely followed the movement of the 10-year treasury yield, which is a widely watched benchmark for long-term interest rates.
When the treasury yield climbs, mortgage rates tend to follow. When the yield falls, so do mortgage rates.
It has been a predictable pattern for over 50 years. So predictable that there is a number experts consider normal for the gap between the two. That is known as the spread, and it normally averages about 1.76 percentage points.
So, why do experts predict rates to fall? Over the past couple of years, the spread increased because of the uncertainty in the economy. As the spread increased so did mortgage rates.
But here is the hope. Even though there is still some uncertainty related to the economy, this spread is starting to shrink as the forward path is becoming clearer. And that opens the door for lower rates.
Besides the spread continuing to decrease, the 10-year treasury yield is also forecast to come down. Combining the two, there are two key forces potentially pushing mortgage rates down in 2026. How much? With the spread at 2.25 percent, and the fed fund rate at 4.09 percent, the mortgage rate is 6.34 percent. If the spread becomes normal at 1.76 percent, with the fund rate at 4.09 percent, rate is 5.85 percent.
Will the spread reach the 1.76 percent number next year. That has to be seen. But the trend is optimistic that it will fall, and with it 30-year mortgage rates.
Five Things You Should Know About Fire Extinguishers
This is not about buying or selling a home, but saving it. It is about fire extinguishers. Especially important considering the time of year with fireplaces roaring, candles lighting and ovens cooking. According to the National Fire Protection Association, a homeowner only has two minutes (or less) from when a smoke alarm goes off to react. And for a small fire, a fire extinguisher could save your home from destruction.
So, with that, here are some guidelines on fire extinguishers.
1.Take them out of the packaging and have them accessible, and not in a corner somewhere;
- As a general rule, replace them every 10 years. But check the manufacturer’s recommendation.
- Check the pressure gauge on the extinguisher making sure it still has the proper pressure, normally within a colored area. Also check the can, hoses, and nozzles for any damage or rust.
- Keep the extinguisher where a person does not have to travel more than 40 feet to reach it. And not on a different floor. Also, not under the kitchen sink where it can get blocked by other items.
- There are different kinds. For home use, look for those with A, B, C markings. A, for ordinary materials, like cloth, wood, and paper. B, for combustible and flammable liquids, like grease, gas, oil. C, for electrical equipment, like appliances, tools or other equipment plugged in. Most home improvement stores carry multi-purpose ones.
Better to prepare now, then be sorry later. Hope this helps.
