President Donald Trump's plan to introduce 50-year mortgages could increase the financial risks for both homeowners and lenders, according to Mark Zandi, the chief economist at Moody's Analytics.

Speaking with Newsweek , Zandi said borrowers taking on a five-decade loan would struggle to build equity—with most payments in the first decade being on interest rather than principal. With limited equity, homeowners would have less of a financial cushion should a shock occur—a drop in house prices or unexpected expense—and therefore be at "greater risk of default on these loans."

Given this heightened risk, Zandi said interest rates would be "significantly higher" than on standard 30-year mortgages, eliminating many of the cost savings that would result from the longer repayment period.

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