50 year mortgages are a leveraged short

Imagine locking in today’s interest rate and today’s house price… for the next half-century.

That’s what a 50-year mortgage lets you do.
At first glance it sounds insane — who wants to be paying off a house at 85? But strip away the emotion, and you’re executing one of the most powerful (and under-appreciated) trades available to regular people: a highly leveraged short on the US dollar, disguised as homeownership.

The Core Mechanic

With any long-term fixed-rate mortgage you borrow a massive pile of today’s strong dollars and repay them with tomorrow’s weaker dollars. Inflation does the work for you.

A 50-year mortgage simply extends that game an extra 20 years beyond the usual 30-year term — turning a good trade into an extraordinary one.

Quick Example

• House price: $800,000
• Down payment: 20% ($160,000)
• Loan amount: $640,000 at 7% fixed
• 50-year payment: ~$3,800/month (principal + interest)

That $3,800 is fixed in nominal dollars forever (or at least for 50 years). It never rises with inflation, rents, or wages.

How that payment feels over time (assuming ~3–4% average inflation/wage growth):

Your grandchildren will laugh at how cheap Grandpa’s housing payment is.

This Is Textbook Shorting the Currency

When you short a stock:
→ Borrow shares → sell them today → buy back cheaper tomorrow.

With a long fixed-rate mortgage:
→ Borrow dollars when they’re expensive (high purchasing power)
→ Repay with dollars when they’re cheap (low purchasing power)

The longer the duration, the more inflation you harvest.

Why 50 years makes it leveraged:

1. Leverage — You control an $800k asset with only $160k of your own money (~5:1)
2. Extended duration — 20 extra years of dollar devaluation working for you
3. Asymmetric payoff — Downside capped (walk away or refi); upside from debasement is unlimited

The Government’s Bias Guarantees the Trade

The US has a structural bias toward inflation:

• Deflation is political poison
• Inflation is the easy way out of a debt-to-GDP ratio that’s already >100% and climbing

Every extra year you push fixed nominal payments into the future is another year the Fed’s printing press erodes what you owe.

If we ever get 1970s-style 7–10% inflation again? The real value of that $640k loan gets annihilated — especially with the extra 20 years a 50-year term gives you.

Historical Precedent

Countries with chronic currency debasement invent ultra-long mortgages for a reason:

• 100-year mortgages in Japan during its zero-rate era
• Generational mortgages in parts of Latin America

When people stop trusting the currency over decades, they scramble to swap cash for hard assets on the longest fixed terms possible.

Caveats (Yes, They Exist)

• Property taxes and maintenance aren’t fixed
• You’re exposed to interest-rate risk if you move or refi early
• You need income growth to keep pace

But if you plan to stay put (or rent the place out) for decades and you believe the dollar will keep losing 2-4% purchasing power per year indefinitely (as the bond market currently expects), a 50-year fixed is one of the best inflation trades most citizens will ever be offered.

Bottom Line

A 50-year fixed-rate mortgage turns your primary residence into a:

• Leveraged
• Tax-advantaged
• Socially acceptable

…short position on the thing the US government can (and does) print without limit — the US dollar.

The longer the term, the bigger your bet that tomorrow’s dollars will be worth less than today’s.

History says that’s usually a very, very good bet.