Here's an interesting take on President Donald Trump's 50-year mortgage proposal: maybe we won't need it at all if the Federal Reserve would just get moving on rate cuts. That's according to Joseph Lavorgna, counselor to Treasury Secretary Scott Bessent, who shared his thoughts at the Reuters NEXT summit in New York on Wednesday.

The Fed Is Moving Too Slowly, Says Treasury

Lavorgna's argument is pretty straightforward. The 50-year loan concept, which the White House and Federal Housing Finance Agency have been floating as a way to shrink monthly payments, becomes less relevant if the Fed actually lowers rates at a meaningful pace.

"We won't need a 50-year mortgage if the Fed was lowering its rates, which I think it will," Lavorgna said. He didn't hold back criticism either, noting the central bank has been "very slow and uneven on that score" and keeping policy "too tight," which is putting pressure on housing and other rate-sensitive parts of the economy.

His view? More aggressive Fed cuts that bring policy "to neutral, if not somewhat stimulative" could pull mortgage rates down naturally, without pushing buyers into half-century debt obligations.

The Affordability Crisis Isn't Getting Better

The White House pitched ultra-long mortgages as one answer to the affordability crisis, but critics aren't buying it. They've told the Associated Press the plan "would do little" to fix the underlying issues, particularly the shortage of available homes and borrowing costs that remain stubbornly high.

Average 30-year mortgage rates are still sitting above 6%, according to Freddie Mac. They've been stuck there since 2022, and it shows in the numbers. Annual home sales are hovering around 4 million, well below what was normal before the pandemic.

The Math on 50-Year Mortgages Gets Ugly

Let's talk about what a 50-year mortgage actually means for your wallet. A Reuters analysis from mid-November crunched the numbers on a $400,000 loan at 6.5%. Sure, you'd save about $270 per month compared to a 30-year loan. But here's the kicker: total interest paid jumps from roughly $510,000 to nearly $953,000.

That's the trade-off. Lower monthly payments now, but you're essentially doubling your interest bill over the life of the loan. Several economists, including Moody's Mark Zandi and former Obama adviser Betsey Stevenson, have detailed how Trump's 50-year mortgage push could dramatically increase lifetime interest costs while slowing down how quickly homeowners build equity.

So what's the solution? Lavorgna is betting on the Fed. Whether that's enough to crack the housing affordability puzzle remains to be seen.