So your adjustable rate, interest only mortgage is now so high you can’t afford the payments?

Don’t worry!  The mortgage industry has just the answer:  The 50 Year Mortgage!

With a 50 Year Mortgage the lender gives you a fixed introductory rate for five years, followed by an adjustable rate mortgage for the remaining 45 years of the loan.

With about one-half of first time home buyers at age 32 or older a 50 year long mortgage would continue well beyond the average retirement age.

So how does a 50 year mortgage compare to the traditional 30 year mortgage?  Well, since a 50 year mortgage is not a fixed rate mortgage a direct comparison is impossible.

But let’s pretend for a moment that you could get a 50 year fixed rate mortgage and compare it to a 30 year fixed rate mortgage, both for $250,000.00 at six percent interest.

The monthly note on the 30 year loan would be $1,498.88 and on the 50 year loan it would be $1,316.01, resulting in the 50 year mortgage being $182.87 lower per month.

However, the total for interest and principal payments on the 30 year loan is $539,595.46 while the total on the 50 year loan is $789,607.19, costing the borrower $250,011.72 more than the comparable 30 year loan.

Many of the lenders that were in the subprime market are now offering these 50 year mortgages to their current borrowers as a “way out” of their adjustable rate mortgage.

You may want to consider having an experienced attorney go over your options with you before you consider jumping into a 50 year obligation.

Popularity: 38% [?]