You can get a 40 year mortgage at many banks now. I doubt 40 year mortgages will ever catch on. The banks generally charge a higher interest rate for the longer term so the payments aren't much cheaper than a 30 year loan.
Because 30 years is typically the longest term you can get. True there are "40 year" mortgages but generally they are a worse deal than a 30 year and targeted to people who are bad at math.
I’d love to lock in 30 years at a low rate, would free up lots of money for investment, but since that’s not an option I have to opt for clearing the mortgage in ~6 years, and living like I work at McDonalds until that day arrives.
Probably better for my long term financial health and peace of mind, but the opportunity cost sucks.
30 year mortgage is simply too long for me. I don't have that kind of stability. Mortgage term limit should be 10 years or maybe 15 with 20% down, that would solve a lot of problems. Before you say that I can choose to pay it off in 10 years - I can't. Too many dinks in my area are maxing out on their 30 year mortgages and inflating the cost of housing all around - I wouldn't be able to afford payments on 10 year term loan.
Guys, don't downvote him. Many parts of the world do it like that- your 30yr mortgage is really a series of 5yr balloon amortized for a 30 year period. They don't have the option of a true 30yr fixed.
In many cases, people getting 40 year mortgages would be better off just continuing to rent. We just bought our first home with 10% down and a 30 year note and we’re now basically paying rent to the bank.
What you're describing is a fixed rate mortgage with a 5 year term. We may not allow 40 year terms, but that doesn't mean we don't allow fixed rate mortgages. After the term is up you can renegotiate a new fixed rate term if you want, or move your mortgage.
That said, fixed rate mortgages almost always cost you more in the long run, though a 5 year term is probably going to screw you less than a 25+ year term.
When I refinanced they let me pick a term of a 27 years, of course it was at the 30 year rate. There is no advantage to doing this versus just automatically overpaying the mortgage every month to tune in the target payoff date.
30 year mortgages are standard in the US. If the bank thought that in 28 years the house would be a foot underwater they wouldn't agree to a 30 year mortgage. 30 years or 50 years depends on which projections you are listening to
You can get a fixed 30 year mortgage in the UK. Most people choose not to. There's nothing intrinsicly different about mortgages in the UK compared to the US.
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