50 year mortgage

I heard about the 50-year mortgage recently and it cause me to pause and reflect on what I had just heard.  Mortgages with long amortization periods have been touted as a possible solution to the housing crisis.  Personally, I have my reservations.

It’s very simple.  It’s a mortgage that amortizes over 50 years.  That part is easy.  The problem I had was with the basic math involved.

Average age of a first-time home buyer in the United States:

33, according to NAHB

30, according to NAR

We’ll split the difference and call it 31.5

Average life expectancy for people in the United States:

Men:   75

Women:  81

The simple math:

31.5 years old + 50 years to pay a mortgage = 81.5 years

Compare 81.5 years to the average life expectancy.

If a 50-year loan was the only way I could purchase a house, I think I would be a renter forever.  That’s a scary thought for a country whose economy just collapsed because of our dependence on the housing industry.

Food for thought.