MORTGAGE MADNESS

There’s now talk of 50-year mortgages. Bad idea. First, with the median age of first-time buyers 40, borrowers would likely never pay off their mortgage. Second, the difference between a 10-year mortgage and a 30-year mortgage is 65bps, the gap between the 30-year and 50-year mortgage will also be sizable. Absent a deep secondary market for 50-year mortgages, investors will be reluctant lenders. Lastly, easier financing just raises prices.