How 50-Year Mortgages Turn Home Owners into Renters (youtube.com)
More purchases, real estate will sell more, and that industry will upturn because just more transactions, but people will pay more money to the government because just more interest payment.
Paying $1.5m for $500k loan for $500k house. $1m in interest.
The monthly payment is not much lower for the 50 year loan than the 30 year loan.
Bankocracy packaged as something ‘to help the common man.’
The asset doesn't accrue in terms of equity with a 50 as fast as a 30. Why bother making payments if you have little equity in the home? People might send their keys in to the bank more easily.
In a recession, the Central Bank will buy mortgage backed securities to further inject liquidity in house markets, artificially raising demand and thus prices for the houses on the books for the banks. Like 2008.
‘There is no truly private market for 50 year mortgages. If the administration does succeed on creating a 50 year mortgage scheme, it will depend heavily on government intervention.'
Taxpayers and holders of dollars (savings accounts) ‘will have to endure the additional price inflation from corporate bailouts that will come when those 50 year mortgages start going belly up.’
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