50 Year Mortgages

• Equity- Even though the portion of your payment going toward your principal is small, (on a $200,000 loan at 6.5%, it may be as low as $44 per month), it’s still something being applied to your principal, unlike interest only payments.

• Lower payment- The monthly payments are lower (although on the same example as above compared to a 30 year, 6.00% loan, the payment is only about $73 lower).

• Qualifying- That small payment difference might just be enough to qualify you for a home loan

50 Year Mortgages- Disadvantages

• The 50 year mortgage means 20 more years of interest payments. On a $200,000, 6% interest loan, the interest for a 30 year loan for the life of the loan would amount to $231,676. On a 50 year loan you’d pay out $431,885 over the life of the loan.

So, while it’s still a lower payment and your equity decreases, many critics contend that the amount of interest you pay simply isn’t worth it.

Steve Wyrostek -HomeLoans.org Expert A 20 year plus veteran of the insurance industry, Steve managed departments in the personal and commercial lines areas of major insurers. He’s familiar with how insurance—ranging from boat to workers compensation—works.