Why Donald Trump’s 50-Year Mortgage Pitch Won’t Fly in Canada

Donald Trump reignited a national debate this week after proposing that Americans should be able to take out 50-year mortgages, a dramatic extension of the already long 30-year terms common in the United States. While the idea may appeal to buyers searching for lower monthly payments, housing experts across both countries say the risks are significant. And in Canada, the concept is all but off the table.

Lower Payments, Higher Lifetime Costs

Trump argues that stretching payments over half a century simply means borrowers pay less per month. In the short term, that is true. A longer amortization spreads the debt more thinly, easing the initial financial burden.

However, U.S. economists warn that the long-term cost is massive. Because a 50-year loan amortizes so slowly, the bulk of early payments go almost entirely to interest. According to calculations cited by the Associated Press, a typical borrower could pay nearly 400,000 dollars more in interest compared with a 30-year loan.

Experts say this slow equity build leaves homeowners more exposed if prices fall, making the product riskier than it appears. Some analysts described the proposal as more of a political gimmick rather than a real path to affordability. They argue that the root issue is a lack of housing supply and that stretching amortizations only affects the demand side of the market.

Why Canada Has No Appetite for 50-Year Amortizations

While the U.S. entertains the idea, Canadian mortgage experts are clear that ultra-long amortizations are not something Canada is likely to adopt.

Penelope Graham of Ratehub.ca explains that the key difference lies in how mortgages are funded. In the United States, lenders package mortgages into investments and sell them as mortgage-backed securities. This structure shifts risk away from banks and makes very long-term loans possible.

Canada, however, relies heavily on deposit-based funding, meaning GICs and savings accounts. These deposits typically align with much shorter time frames. Since deposits often renew every five to ten years, lenders in Canada cannot safely carry the risk of extremely long mortgage terms.

Another major difference is that Canadians do not lock into a single rate for decades the way many Americans do. A typical borrower in Canada will renew their mortgage three to five times during a 25-year period. That renewal structure naturally limits the possibility of very long mortgage products.

A History of Tightening, Not Expanding

Canada experimented briefly with longer amortizations in 2007, when insured mortgages up to 40 years were allowed. Within a year, during the early stages of the U.S. mortgage crisis, the federal government reversed course and began reducing amortization limits.

Over time, those limits were brought down to 35 years, then 30, and eventually to 25 years for insured borrowers. The only flexibility added in recent years has been a specific change for insured first-time buyers of newly built homes, allowing them to amortize over 30 years.

Graham notes that although there has been some early discussion about longer amortizations, the idea has never gained momentum. The federal position remains clear: the longer a mortgage is, the more inherently risky and expensive it becomes.

Outlook

Industry groups continue to push for broader access to 30-year insured mortgages, but they also acknowledge the importance of protecting the stability of Canada’s lending system. Mortgage expert Ron Butler points out that the federal government has consistently avoided changes that would artificially stimulate demand, such as 40 or 50-year terms. Given that stance, there is little reason to expect any major shift.

Trump’s proposal may influence the conversation in the United States, but in Canada the direction is firmly established. With a more cautious lending structure and a long history of tightening rather than loosening rules, ultra-long amortizations remain an idea that Canada is unlikely to embrace.

Source: CBC News