Subsidizing Homeborrowership

[jon-nyc]

I ran the numbers real quick on the median mortgage (at origination) of 324k after 10 years (average time we own homes).

At selling time you’d have 17k of equity vs 50k. That house you got the 324k mortgage for is valued at ~410k.

17k wouldn’t cover closing costs. You built essentially no equity unless the value increased.

[LuFins Dad]

@jon-nyc said in Subsidizing Homeborrowership:

I ran the numbers real quick on the median mortgage (at origination) of 324k after 10 years (average time we own homes).

At selling time you’d have 17k of equity vs 50k. That house you got the 324k mortgage for is valued at ~410k.

17k wouldn’t cover closing costs. You built essentially no equity unless the value increased.

As a comparison the 30yr mortgage would provide 51k of equity.

In all fairness, you would also have to factor in the home’s current market value after 10 years. That would likely bump up the equity substantially;

[jon-nyc]

I did mention that that would be the entirety of your equity. Though that depends on population growth outpacing housing stock growth, which, while always true in our lifetimes, is really now dependent on immigration.

[jon-nyc]

Why not perpetual mortgages?

The UK has perpetual bonds. Some are left over from the War of Austrian Succession (~1750). They used to fuck with our modeling.

It formalizes the idea that you make payments as low as possible and just accept that your equity will only be from appreciation

[jon-nyc]

Of course it only lowers your payment in our example by $21 a month. lol

[jon-nyc]

By the way it looks like the UK called all its remaining perpetual bonds in 2015 - after I was out of the business. (They were always callable)

[89th]

You know, for having the most powerful country with the best GDP and all that... we sure are putting a ton of bandaids over near-existential economic problems.

[Horace]

It's easy to understand where the economic populism of the young generation is coming from. And it's not stupid, not at all. Individual policies might be, but not the perspective on unfairness and hopelessness.

[jon-nyc]

I couldn’t agree more.

If we would just make it legal to build housing everywhere it would go a long way to reliving it, IMO.

(When I say ‘everywhere’ I mean throughout the country, I don’t mean, say, in national parks).

[jon-nyc]

https://www.politico.com/news/2025/11/10/trumps-50-year-mortgage-plan-is-getting-panned-allies-blame-this-man-00645654?utm_medium=twitter&utm_source=dlvr.it

[LuFins Dad]

@Horace said in Subsidizing Homeborrowership:

It's easy to understand where the economic populism of the young generation is coming from. And it's not stupid, not at all. Individual policies might be, but not the perspective on unfairness and hopelessness.

Just wait till the AI layoffs hit.

While I’m an optimist and think there will be potential massive economic opportunities, that will be after quite a bit of economic pain for many people….

[Mik]

Agreed, LuFin. I'm gently coaxing my daughter to get on top of this and be the one who pilots using it in project management at her firm. i say gently because she's up to her ass in alligators at the moment through poorly written contracts and scopes.

[Axtremus]

@jon-nyc said in Subsidizing Homeborrowership:

https://www.politico.com/news/2025/11/10/trumps-50-year-mortgage-plan-is-getting-panned-allies-blame-this-man-00645654?utm_medium=twitter&utm_source=dlvr.it

It’s like they don’t expect Trump to be able to think for himself. How rude!