No. of Recommendations: 3
I can't quite decide what I think about the 50 year mortgage. I've long pounded the drum that a sub 4% mortgage was the financial deal of a lifetime. The debt is fixed-rate, non-callable, very long term, and tax advantaged. And at sub-4% it is roughly equal to the historical inflation rate. Which means you are borrowing the money for free. Currently bonds pay higher interest than my mortgages, which means the banks are paying me (not really, but kind of). And thanks to inflation, my payments are effectively getting smaller each year. By the time the mortgages are done my payments will be more than cut in half in real terms.
So if 30 is good, is 50 better? I don't think so. It doesn't lower your payments by much. And 50 years is way longer than most people will own a house, so you wind up paying way more in interest.
The portable mortgage is kind of interesting idea, but I have no idea how it could work. At closing, the bank gives the seller a check. If you buy a new house, the bank needs to cut another check. Presumably, you could sell your house, the bank keeps that money, and cuts a new check the seller. But that seems like a lot of karate.
