40 Year Mortgage Information

This type of loan is nearly identical to the traditional 30 yr Mortgage. The only difference, in fact, is that the loan is amortized over a term that is 10 years longer (480 Months instead of 360 Months). The effect of this is to lower the monthly payment.

However, it should be noted that the interest rates for 40 yr Mortgages are typically slightly higher than those of 30 yr Terms so this should be included in any comparison of these two loans. For example, a 30 yr Term on a $415,000 loan might have a rate of 6.5% and a payment of $2,623. A comparable 40 yr Term would have a rate of about 6.75% and a monthly payment of $2,504. So even with a slightly higher rate you would still be able to save a meaningful amount of money.

It should be noted that the interest rate and monthly payment of 40 yr Terms remains constant through out the term of the loan. It operates as a traditional fixed rate loan.

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Return to the mortgage home page. As long as consumers continue to make minimum monthly payments, creditors will not negotiate a reduced mortgage net branch balance. However, when mortgage terms payments stop, balances continue to grow because of late fees and ongoing interest.