40-Year Mortgage options provide lower monthly payments and increased buying power.
Longer Loan Terms, More Flexible Payment Options
- 40-Year Fixed Mortgages
- 40-Year Fixed Interest-Only Mortgages
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What is a 40-Year Fixed Mortgage?
What is a 40-Year Fixed Interest Only mortgage?
40-Year Fixed Interest-Only Mortgages with Newfi are a fixed rate hybrid mortgage solution for borrowers looking to spread their payments out across a longer loan term and pay less in the early part of the loan. This can lower monthly payments even more than a 40-Year Fixed Mortgage.
For the first 10 years, borrowers pay only the interest balance on their mortgage, instead of both the principal and interest. After the 10 years are up, the loan effectively becomes a standard 30-year fixed rate loan with the same interest rate, where each payment goes toward both your interest and reducing your loan principal.
How do I qualify for a 40-Year Mortgage?
Frequently Asked Questions
- Borrowers who choose the Interest-Only option will have lower monthly payments for the first 10 years of the mortgage.
- Your interest rate is fixed for the life of the loan
- Gives you 40 years to pay off your loan
- Interest rates may be higher than with a conventional, fixed-rate loan
- You pay more in interest over the life of the loan, compared to shorter-term loans like the 30 year fixed or 15 year fixed
- Takes longer to build equity
- Monthly mortgage payments will rise once the interest-only period ends, if you have one
- May be harder to refinance unless your property appreciates during the loan period
- A 30-Year Fixed-Rate Mortgage allows you to pay less interest over the life of the loan compared to a 40-Year Mortgage. Interest rates are typically lower and you can start building equity immediately. Monthly mortgage payments are likely to be higher, however. Learn more about the 30-Year Fixed Rate Mortgage here.
- A 40-Year Fixed Rate Mortgage allows you to afford more house for a given payment and spread your payments over 40 years. The lower monthly payments also mean more cash for you to spend or invest on a monthly basis. However, you pay more in interest over the life of the loan and do not begin to build equity until the interest-only period expires, or you decide to end it. A 40-Year fixed Rate Interest Only mortgage offers borrowers even lower monthly payments during the first 10 years of the mortgage, which is an interest-only period.
Can I Pay Toward My Principal Balance During the Interest-Only Period on a 40-Year Fixed Interest-Only Mortgage?
Yes! With a 40-Year Hybrid Mortgage from Newfi, borrowers are able to pay toward their principal balance during the IO period without having to worry about penalties or fees.
Your exact rates will depend on the mortgage you choose, the rate you qualify for and the terms you select. 40-Year Mortgage rates are typically higher than 30-Year mortgage rates. Contact us to review your options and calculate your payments.
Because everyone has their own unique situation, we recommend speaking to a loan advisor about your options as your first step. Go to newfi.com/get-started or fill out the form on this page for a free consultation with one of our licensed loan advisors to learn about what documentation and qualifications you may need!