Articles about 40 year mortgages

Who is a forty year mortgage suitable for?

If you take out a mortgage for forty years you will need to establish how you will be able to keep making the payments. For most people this might be done by you planning to stay in work for the period of the mortgage. But 40 years is a very long time so make sure that you have a plan in place before you make such a long commitment.

Your mortgage provider may not accept you for a forty year mortgage if it considers you too old. Taking out a mortgage that is scheduled to run for forty years may not be the best idea if you aged 50! You may be optimistic about your longer term prospects of living to be over 100, but lenders may take a more cautious approach.

Economic situation - now and in the future

The current economic problems around the world have increased. Countries are increasingly dependent on one another so if consumer demand is low in one part of the world it can affect other countries. The biggest problem faced by most people in this situation is job insecurity. If you will be paying a mortgage for 40 years you will have to keep up repayments for this whole period. You need to ask yourself how you would manage to survive and continue to pay the mortgage if you lost your job and remained unemployed for 1,2, 3 or more months.

It is impossible to predict even a few months ahead let alone many years. If you think credit cards could see you through a short term crisis in your finances don't assume that it always be this way.

40 year mortgage and interest rates

Interest rates are at historically low rates with governments slashing official interest rates in response to the banking crisis and the recession. However, many people expect interest rates to rise as the economy improves. Interest rates on forty year mortgages will not be excluded.

Many people stretch themselves when they take out a mortgage and this is likely to be true as well for people looking at a 40 year mortgage. Are you able to cope with an increase in the interest rate on your forty year mortgage. Make sure that you are aware of the increased amount you will be paying on your mortgage every month for every 1% increase in interest rates. If you could not cope with a 1% increase in your payments then you could consider a fixed rate deal. Variable rate mortgages are perhaps not the best option for you.

Fixed and variable rate 40 year mortgages

Compare the deals on fixed and variable interest rates that are available with 40 year mortgages. A fixed rate provides an element of security and you will know the size of the mortgage payment what you will be committing yourself to. It may depend upon your attitude towards risk. Your lender may offer you different fixed rate periods. This could be as short as one year but other periods of two, three and five years may be available. Some lenders may offer even longer periods so make sure that you consider all the options and make a choice that best reflects your circumstances.

Are 40 year mortgages the longest available?

Coming soon an article about how long can a mortgage be? Is it realistic? Experiences from around the world.

Do 40 year mortgages affect property prices?

Coming soon an article discussing this sensitive subject.

The information on this website is for general interest only and is not specific to any single country. Take professional advice before you sign anything or make a financial commitment. Refer to our legal page for further details. Rules vary between countries but you could be at risk of losing your home if you do not keep up with your repayments.

40 year mortgage

Issues about 40 year mortgages