Donald Trump’s pitch for ultra‑long 50‑year home loans is being met with alarm by Australian finance experts, who say the idea would deepen the country’s housing problems rather than solve them.
The US president has floated a 50‑year mortgage backed by the US government to help first‑home buyers get onto the property ladder, with Federal Housing Finance Agency director Bill Pulte reportedly hailing it as “a complete game changer” for home buyers – but Australian economists aren’t convinced.
With households already squeezed by a cost‑of‑living crisis and the Reserve Bank (RBA) expected to keep rates on hold, local economists and industry figures argue that importing US‑style 50‑year mortgages would inflate prices, extend debt, and do little for true affordability, news.com.au reported.
With today’s cash rate decision looming, all 35 experts in Finder’s RBA Cash Rate Survey are predicting the RBA will hold the cash rate at 3.6%. At the same time, many Australians have little financial buffer left.
A staggering 43% of Aussies have less than $1,000 in savings, according to Finder’s Consumer Sentiment Tracker, highlighting the immense pressure on family budgets.
Graham Cooke, head of consumer research at Finder, said now is the perfect time for households to get proactive about their finances rather than relying on riskier loan structures.
“Take a hard look at where you’ve been spending your money," Cooke said. "Stop paying for things you don’t need or aren’t using – think unused memberships and subscriptions – and don’t pay too much for what you do need – your mortgage, energy provider.
“Then think about ways to bring in extra cash, whether through investing, a savings account with a better interest rate, or starting a side hustle.”
Across the Pacific, the Trump administration recently floated the concept of a 50‑year mortgage repayment plan, pitched as a way to make homeownership more accessible.
However, when Australian experts were asked to weigh in through Finder’s panel, the response was overwhelmingly negative.
A significant 79% (22 out of 28 panellists) believe these ultra‑long mortgages are not a good tool for improving housing market accessibility here.
Stella Huangfu from the University of Sydney said that while 50‑year mortgages might reduce the size of monthly repayments, they do not actually make housing cheaper.
“In most cases it actually allows people to borrow more, which pushes prices even higher. Buyers end up paying far more interest over their lifetime, carrying debt for decades longer, and building equity much more slowly,” Huangfu said.
Dale Gillham from Wealth Within warned that stretching loan terms primarily benefits lenders and risks pushing property prices even further out of reach.
“Increasing the mortgage length benefits the lenders far more than it benefits consumers,” Gillham said.
“Australia has this unique love affair with property, and we need to look deeper into why this is.
“Further, we need to look at what is driving prices to unrealistic levels. In the last 40 or so years, housing affordability has gone from around four times the average wage to over eight times.
“As it stands, due to government compliance, taxes and fees, building new homes is far from affordable, and in many cases is not viable for investors.
“We need to fix the systemic issues first before we make loans more accessible, as this will only pour more fuel on the fire, with the financial institutions the big winners.”
Shane Oliver from AMP also cautioned that 50‑year terms would not address the core issue.
“They will just mean people will end up paying even more in interest payments without doing anything to improve affordability,” Oliver said.
Despite the strong opposition, a small group of experts see some potential for 50‑year mortgages in certain circumstances.
Nicholas Gruen from Lateral Economics said 50‑year mortgages could be a good tool if housing continues to be treated primarily as an asset market.
“Debt needs to be serviced, not paid off. For so long as we treat housing as an asset market, that’s how we should see it,” Gruen said.
Leanne Pilkington from Laing+Simmons agreed that policymakers should at least be open to examining all possible levers.
“Affordability is a major issue and it makes sense to explore every potential solution available,” Pilkington said.
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