First-Time Buyers Stretch Affordability, Turn To 50-Year Loans And Retirement Funds

May 18, 2026

By National Mortgage Professional

Most aspiring homeowners haven’t engaged a lender as buyers increasingly rely on unconventional financing strategies

First-time homebuyers remain eager to enter the housing market despite ongoing affordability pressures, but many are increasingly willing to stretch traditional financial boundaries to make homeownership possible.

A new survey from TD Bank found aspiring buyers are open to alternative financing approaches, including longer loan terms, tapping retirement savings, and taking on higher monthly housing costs in pursuit of homeownership.

The survey, which examined the attitudes and behaviors of Americans planning to purchase their first home in 2026, found 81% remain optimistic about the housing market and the same percentage still view homeownership as a smart long-term investment.

At the same time, affordability concerns are clearly reshaping borrower behavior.

Among respondents, 74% said they would consider a 50-year mortgage if one were available, reflecting growing openness to unconventional loan structures that could lower monthly payments. According to TD Economics, a hypothetical 50-year mortgage could reduce monthly payments by approximately $150 to $250 compared to a traditional 30-year loan, though borrowers would build equity more slowly and pay significantly more interest over the life of the loan.

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The survey also found that younger borrowers are increasingly willing to use retirement savings to purchase a home. Seventy-eight percent of younger millennials and 74% of Gen Z respondents said they would use funds from a 401(k) to help finance a home purchase if permitted.

Meanwhile, 31% of respondents said they have already reduced or paused retirement contributions while saving for a down payment.

For LOs, the findings point to a borrower base that remains highly motivated, but may require more education around long-term affordability, budgeting, and financing tradeoffs.

The survey found that many buyers are already preparing to exceed traditional affordability benchmarks. More than half of respondents said they expect to spend between 26% and 35% of monthly income on mortgage payments, above the traditional 28% front-end debt-to-income guideline often referenced in mortgage affordability discussions.

The data also suggests significant opportunity remains for originators to engage first-time buyers earlier in the process.

Despite strong purchase intent, only 27% of respondents said they have spoken with a lender, while just 22% said they have secured preapproval or prequalification.

That gap could represent a major opportunity for mortgage professionals focused on financial education, affordability planning, and first-time buyer outreach.

Steve Kaminski, head of U.S. residential lending at TD Bank, said the survey shows buyers are adapting their expectations in response to market conditions.

“While affordability challenges persist, first-time homebuyers are showing resilience and flexibility in how they approach the path to homeownership,” Kaminski said in the report.

The survey also found that buyers are broadening their expectations around available housing inventory.

Half of respondents said they would consider purchasing a fixer-upper, potentially creating additional opportunities for originators familiar with renovation lending products and financing strategies.

Family support is also playing a growing role in first-time purchases. Two-thirds of respondents said they either expect to receive or are already receiving financial assistance from family members or loved ones to help purchase a home.

At the same time, many aspiring buyers appear focused on improving mortgage readiness. Among respondents actively monitoring their credit, 70% said they are prioritizing on-time payments, 59% are reviewing credit reports for errors, and 57% are paying down debt. More than half said they have already created a budget for homeownership.

According to TD, the survey was conducted among prospective first-time homebuyers planning to purchase a home in 2026.