What are 40 Year Mortgages?

Nice home in the suburbs.Looking for a way to keep your mortgage payments low without having to take on the risk of an adjustable rate or interest only financing solution? If so, a 40 year mortgage is at least worth exploring. 40 year pricing tends to be slightly higher than that of a 30 year fixed mortgage, but the monthly payment could be lower due to the extended term of the loan. This program may be a good alternative to borrowers who do not feel comfortable in an adjustable rate mortgage but want or need the low monthly payment that this program offers.

Customers who pursue a 40 year mortgage are usually looking for one of two things – either they are searching for a lower payment so they can afford a more expensive house, or they simply want a lower payment without the instability of an adjustable rate mortgage (ARM) product. Contact the lenders and brokers listed on ForTheBestRate.com to find out if a 40 year home loan is the right choice for you and your family.

Comparison of a 40 year mortgage, 30 year mortgage, & 5/1 ARM (example)

Couple in their kitchen which they purchases with a 40 year fixed rate mortgage.

40 Year Fixed Rate Mortgage Rate Program
$200,000 Loan Amount
6.125% Note Rate
$1,118.61 Monthly Principal & Interest Payment
Interest Paid Over Life of Loan: $336,930.61

30 Year Fixed
$200,000 Loan Amount
6.000% Note Rate
$1,199.10 Monthly Principal & Interest Payment
Interest Paid Over Life of Loan: $231,676.38

5/1 ARM
$200,000 Loan Amount
5.750% Note Rate
$1,167.15 Monthly Principal & Interest Payment (first 5 years – then adjusts)
Interest Paid Over Life of Loan: Will vary with fluctuation in rate.

As you can see, you will likely drive down your monthly payment with the 40 year mortgage but the amount of interest paid over the life of the loan could be significantly higher. The big questions that you need to ask yourself are,  ”what are you hoping to accomplish with your home investment and how will your loan program complement those objectives?” Contact a mortgage professional to help you form a road map to get you where you want to be. Best of luck financing great 40 year mortgage rates for your next purchase or mortgage refinance.

Potential Benefits of a 40 Year Home Loan

  • Potential for lower monthly payments than with a 30 year fixed.
  • Security of fixed rate product.
  • May help borrower afford more expensive home.
  • Fixed monthly payments may simplify budgeting process.

Check Today’s Mortgage Rates from Competing Mortgage Companies

Ready to conduct some mortgage rate comparison shopping? You can use the tables on ForTheBestRate.com to research interest rates from some of the Nation’s leading mortgage companies. Please note that the company that provides the data for the rate table does not always feature 40 year mortgages. You may need to view 30 year rates and then contact the various lenders and brokers to ask about their 40 year home loan programs.

Types of Occupancy
Most lenders who have 40 year fixed rate mortgage programs will lend on primary residences, second homes, and investment properties. Rates tend to be higher on vacation and rental homes.

Types of Properties
The majority of the lenders featured in the rate tables on ForTheBestRate.com finance single family homes, duplexes, 3 & 4 unit homes, condos, and townhouses.

You can compare fixed rate pricing using the rate table below. You will need to contact the various companies to inquire and see if they offer 40 year mortgages. The rate table does not display 40 year pricing.