Affordability in Focus

Every year, the mortgage world gives us something new to talk about. This year, two topics keep popping up: rising conforming loan limits and the growing chatter about 50-year mortgages.

Both are tied to affordability — one actually helps, and one sounds like it helps but may do the opposite. Let’s break it down in normal-human terms.

Conforming Loan Limits Are Up (Again) — And That’s Good for Buyers

The Federal Housing Finance Agency (FHFA) increased conforming loan limits for 2025 to $832,750 ( a raise of $26,250) because home prices continued to rise nationwide – albeit not at such an aggressive rates as we’ve seen in years past.  Home prices haven’t raised everywhere, not at the same pace, but enough that FHFA adjusted the limit upward to keep borrowers aligned with current market realities.

For example, as reported from RMLS, the average home price in Portland has actually fallen year to date ($611,700 in Jan 2025 to $610,300 in Oct 2025).  Further price declines are expected throughout the winter.  Exploring the ‘why’ behind that price drop will be the focus of next month’s blog post.

Why does this new loan limit matter?

1. It keeps more people in the “conforming” world.

Conforming loans come with better terms, lower down payment options, and more flexible guidelines than jumbo loans. If loan limits stayed flat while prices rose, far more borrowers would get pushed into jumbo territory — making affordability even worse.

2. It widens the buying window for first-time and move-up buyers.

A higher limit means buyers can finance more while staying in programs designed for broad access, not elite qualification.  This might either make you feel old (or maybe young!), but the median age of the first-time home buyer in 2025 is 40 years old.  That is dramatically higher than where it was back in 2000, when it was a 32 year old.

3. It helps stabilize monthly payments.

Even with higher prices, staying in a conforming loan usually means lower interest rates than jumbo. In this market, every fraction of a percent matters.

So in the affordability conversation, the loan limit increase is a real win. It doesn’t make houses cheaper — I wish I had that kind of power, and I do think that is coming — but it expands access to more favorable financing at a time when buyers need every advantage.

Now… About This 50-Year Mortgage Idea

Every few years, the mortgage industry likes to float a “new” idea for solving affordability. Recently, that idea has been the 50-year mortgage. On paper, it seems simple: stretch the term, lower the payment.

But affordability is more complicated than that — and honestly, in my opinion, the 50-year mortgage creates more problems than it solves.

Let’s be real:

If 15-year loans have a lower rate than 30-year loans, what do we think a 50-year rate is going to look like?

Exactly. Investors aren’t lining up to wait half a century to get their money back. Longer terms = more risk = higher rates.

That higher rate could easily cancel out — or even outweigh — the perceived lower payment from the extended term.

Easy high school level math here. Today, at the time of authorship (12-1-2025), an average rate (per Mortgage News Daily) on a home purchase, of someone with 20% down and a 760+ credit score and NOT paying any points to buy the rate down is 7.31%.  On a 15 year mortgage, it is 5.80%.

Let’s apply that same spread (6.31% minus 5.8% = .51%) to a 50 year mortgage.  That takes a potential 50-year mortgage rate up to 6.82%).  On a $500,000 here is what your monthly principal and interest look like:

• 30 year: $3,098.12 @ 6.31% interest
• 50 year: $2,939.74 @ 6.82% interest

Is saving $158.38 a month worth the trade off of an incredible amount of additional interest to the loan?  More times than not, I would say no – the only time my opinion would change is that if that was the difference between qualifying and not qualifying from a ‘debt to income’ ratio standpoint.  For a few, that $158.38 is the difference between being stuck renting and being able to leverage a mortgage to start generating equity in home ownership.  Now, this is just assuming that the rate spread is the same as a 15 vs. a 30-year mortgage.  This spread isn’t 15 years (15 + 15 = 30), this spread is 20 years, so the rate is likely to even be higher than what my back of the holiday cocktail napkin math is penciling out here.

 So, no — as tempting as it sounds, a 50-year mortgage is not the hero of the affordability crisis.

So Where Does This Leave Us?

Affordability is the challenge of the moment. Rising home prices, inflation, and limited inventory have made it harder for buyers to feel confident. But raising conforming loan limits is one lever that does help today.

It expands access.
It preserves better pricing.
It widens the runway for borrowers trying to enter the market.

The 50-year mortgage? That’s more of a headline than a solution.  BUT, I do give the FHFA and the administration credit for at least being willing to brainstorm ideas to bring affordability back into focus.  As a First Time Home Buyer shouldn’t be closer in age to receiving Social Security Payments than they are from graduating High School.

If someone’s long-term financial plan includes paying a mortgage until they qualify for AARP… we should probably have a conversation.

As always, if you want to run numbers, look at scenarios, or talk through real affordability strategies — I’m here, and I actually enjoy this stuff. (Yes, I know that’s strange.)