Overview:
Japan once let grandparents pass mortgage debt to grandchildren who weren’t even born yet. The result? A $9 trillion real-estate crash and three “lost decades” that still haunt the world’s third-largest economy. That’s the real history behind Trump’s new 50-year mortgage push—where your kid’s kid might still be sending checks to the bank.
By Gabrielle Peters | Presence News
The Promise and the Problem
Trump’s proposed 50-year mortgage plan promises short-term relief:
For a $500,000 home at 6.5%, payments drop from ~$3,160 (30-year) to ~$2,780 (50-year) — about $380 less per month.
That savings can help buyers qualify for higher-priced homes. But as economist Tyler Cowen warns, this approach “likely lowers monthly payments but raises house prices, slows equity build-up, and amps default risk in downturns.”[2]
Sound familiar? History abroad offers both clues — and cautions.
Loan Term Comparison
| Loan Term | Monthly Payment | Total Interest Paid | Years Until Paid Off |
|---|---|---|---|
| 30 years | $3,160 | $637,000 | 2055 |
| 50 years | $2,780 | $1,120,000 | 2075 |
Japan: The Intergenerational Debt Pioneer
Japan didn’t just test ultra-long mortgages — it fully embraced them.
During the 1980s real estate boom, banks introduced 100-year “three-generation” mortgages, transferring debt from grandparents to grandchildren.[3]
Today, the government-backed Flat 35 has expanded to Flat 50, offering fixed rates around 1.9% for young families.[4]
The Boom:
Lower payments spurred ownership in a high-cost, low-wage era and offered demographic relief to younger buyers.[5]
The Bust:
These same loans inflated the 1980s asset bubble. When it burst, Japan entered three lost decades of stagnation.[6] Studies show wealthy borrowers used long terms for tax arbitrage, not affordability gains.[3]
Some Japanese families are still paying off loans taken out in 1989.
Key Policy Differences:
- Ultra-low rates (<2%)
- No mortgage-interest tax deduction
- Rapid home depreciation
- Deflationary pressures
Economist Richard Koo described it as a “balance sheet recession” — when collapsing asset values make households hoard cash to pay debt, trapping the economy even at zero rates.[6]
Lesson: Demand-side tricks without supply-side reform can backfire — hard.
United Kingdom: Fresh Experiments in Affordability
The UK began offering true 50-year fixed-rate mortgages in 2024–2025 through lenders like Perenna and April Mortgages — designed for first-time buyers priced out of the market.[7] Some loans can even be passed to heirs.
The Boom:
Perenna wrote £340 million in 50-year loans in its first 90 days — more than Skipton Building Society issued in a year of 40-year products.[8]
The Bust:
Critics warn that long terms inflate prices faster than wages and delay equity growth.[7]
Policy Context:
- Variable-rate culture
- 95% LTV common
- Stamp duty amplifies market shocks
- Post-Brexit volatility adds risk
Portugal: 50 Years with Guardrails
Portugal allows 50-year terms for residents (30 years for non-residents), often linked to Euribor rates.[9]
The Boom:
Helps affordability in Lisbon and Porto, where home prices surged.[10]
The Bust:
Minimal. Strict age caps (loan must end by age 75–80) prevent true intergenerational debt.
EU banking rules after 2008 kept risk low.
Tourism and golden visas, not long mortgages, drive price pressure.
Lesson: Regulation matters more than duration.
Switzerland: The “Eternal” Interest-Only Twist
Switzerland avoids 50-year amortizing loans entirely. Instead, its system allows interest-only mortgages that can last forever.[16]
Loans are split into two “ranks”:
- First Rank (≈66%) — Interest-only indefinitely
- Second Rank (≈14%) — Must amortize within 15 years or by retirement[17]
Typical rates hover around 1.4% (10-year fixed, 2025).[16]
The Boom:
Rock-bottom payments and flexibility support ownership despite prices 19× average income in Zurich.
The Bust:
Limited. Strict rules—80% LTV cap, 33% debt-to-income stress test—prevent blowups.[19]
Switzerland may have “eternal” mortgages, but it also has eternal caution.
Key Policy Features:
- No tax deduction
- Pension-based amortization
- Conservative lending culture
- No full amortization mandate
Quick Hits: Lessons from Retreats
| Country | Max Term | Outcome | Policy Difference |
|---|---|---|---|
| Japan | 50+ (historic 100) | Bubble fuel → Lost decades | Near-zero rates, no tax break |
| UK | 50 (new) | Affordability + price risk | Variable-rate norm, 95% LTV |
| Portugal | 50 (residents) | Controlled via age caps | EU oversight, Euribor linkage |
| Switzerland | Indefinite (interest-only) | Stable, perpetual debt | Split tranches, no full payoff |
Other countries that backed away:
- Mexico: Max 30 years (Infonavit).[11]
- Denmark: 30-year gold standard via covered bonds.[12]
- Australia & Canada: Brief 40–50 year trials — quickly scrapped.[13]
What Top Economists Actually Say
- Tyler Cowen, Thomas Sowell, and the IMF all warn: Extending mortgage terms by 67% typically inflates home prices by 10–15% while nearly doubling total interest paid.[2][14][15]
- Ultra-long loans also weaken central banks’ tools — when payments are fixed for half a century, rate cuts can’t stimulate spending as easily.[15]
In a high-inflation economy like the U.S., that “payment relief” can vanish fast.
The Verdict: Creative, but Dangerous Without Supply Reform
Trump’s 50-year plan might ease monthly burdens for millennials shut out of ownership. But global evidence shows:
- Japan — Bubble and crash
- UK — Rising prices, delayed equity
- Portugal — Guardrails essential
- Switzerland — Perpetual debt, stable but slow
“There are no solutions in politics—only trade-offs.” – Thomas Sowell
Stretching mortgages from 30 to 50 years doesn’t make housing cheaper — it just stretches the trade-off until your grandchildren inherit both your home and your debt.
By the time a 50-year mortgage taken out in 2026 is paid off, the borrower will be 92 years old, and the White House will have seen 13 presidents.
That’s not homeownership.
That’s indenture with extra steps.
Bibliography
- Fortune (2025) — “Trump’s 50-Year Mortgage Math.”
- Tyler Cowen, Marginal Revolution (Nov 8, 2025) — “Should USG Support a 50-Year Mortgage?”
- ScienceDirect (2002) — “The 100-Year Mortgage and Japan’s Bubble.”
- RealGaijin (2025) — “Flat 50 Expansion.”
- NewsOnJapan (2025) — “50-Year Loans Surge.”
- Richard Koo, DataDrivenInvestor (2023) — “Balance Sheet Recession.”
- Factually.co (2025) — “UK 50-Year Mortgages.”
- Bloomberg (Nov 10, 2025) — “Perenna Hits £1 Billion 50-Year Pipeline.”
- TheBanks.eu (2025) — “Portugal Mortgages.”
- Idealista Portugal (2025) — “Fixed vs Variable.”
- HiParion (2022) — “Infonavit Mexico.”
- CNBC (2019/2025) — “Danish Mortgage System.”
- Australian Financial Review (2024) — “40-Year Loans Axed.”
- Newsweek (2025) — “86% More Interest.”
- IMF WP 2025/024 — “Long-Term Debt and Monetary Transmission.”
16–19. Expatica / Swissinfo / SNB (2025) — “Swiss Mortgage Overviews.”
About the Author
Gabrielle Peters is a real estate investor and licensed Realtor® who has been flipping properties, analyzing markets, and dodging crashes for over 15 years—exactly half the length of the “standard” 30-year U.S. mortgage.
Some call it experience. She calls it finishing the race before the loan does.
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