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Is a 50 Year Fixed Mortgage Really a Good Idea?

By Bob Redtree

A 50-year mortgage is good for people who want to afford a more expensive property with less income. The economy is in a state where this may be needed for some. This is being used mostly in places where the median property price is higher than what the average person can afford.

Does a 50 year Fixed Mortgage Have Lower Monthly Payments Than a 30 year Mortgage?

Yes, one can save on their monthly payment with a 50-fixed mortgage, but, their monthly payment may not be significantly lower than one of a 30-year fixed mortgage. A $250,000 mortgage with a five percent interest rate (without property tax and P.M.I.) for 30 years will be $1,342.05 a month, for 50 years it will be $1,135.35 a month. Is it cheaper long term? If you stay in the house the full term with a 30 year fixed mortgage you would pay a total of $483,139.46. With a 50 year fixed mortgage you would pay a total of $681,208.15. That would $198068.69 more. So, if one plans on staying in the house for a long period of time, one should consider this. One should also consider that when trying to get a loan, the interest rate on 50-year fixed mortgage will likely be higher than another mortgage interest rate, closing the distance between monthly payments.

What is Good About a 50 year Fixed Mortgages?

One, it gives buyers a way to avoid having to take interest only or payment option adjustable rate mortgages. Two, it makes properties more affordable for buyers. Three, it’s also good for one who is fair or bad credit. 50-year mortgages are easier to afford, but, can be more costly long term.

Related posts:

1. Are Long-term Fixed-rate Mortgages A Good Idea?
2. Why Should I Get A 30 Year or A 15 Year Fixed Mortgage Rate?
3. Should I get a 30-year or a 15-year fixed mortgage?
4. Is There Such A Thing As A 5 Year Fixed Rate Mortgage?
5. Will I Be Better Off With A 25 Year Fixed Rate Mortgage?