Talk over the weekend as a stimulus to the housing market, in particular the Residential sector gave rise to possible 50 Year Mortgage option.
With a normal shaped yield curve (not inverted), the farther in length/term the higher the rate, as explained by the chart below a 2 year bottom/blue line, 10 year orange/middle and 30 year top/purple line – the longer the term the higher the yield therefore the higher the rate on a Mortgage.
Rather than bore you with the calculations, a 50 Year Mortgage option at this time, would give the holder very little relief in cost on a monthly payment base, much greater long term interest cost, and of course a much longer term.
Not a good idea at this time!
We are always open to changes in the situation, but would caution, 50 Years is a long time no matter the possible changes/incentives, but an inverted yield curve could make this interesting!
Have a Great “50 Year Mortgage Analysis” Day!
John A. Kvale CFA, CFP
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Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
