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Pros and Cons of 50 Year Mortgage Loans


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50 year mortgage loans are not an option for all borrowers, but some lenders will allow the option. These lengthy loans are typically used on very large loans, such as jumbo loans over the nationally recommended loan size. 

Pros of 50 Year Mortgage Loans

You will have very low monthly payments when you stretch your loan out over such a long period of time, even if the loan size is large. The main advantage of spreading a loan out is purchasing a house you can grow into in the future. If you have a small down payment, but you believe you will stay in a home for 30 or more years, you may want to buy a home you will not outgrow in that time frame. 

Cons of 50 Year Mortgage Loans

The main disadvantage to such a large loan is the high cost of financing over time. Longer loans, though they have low monthly payments, typically have the highest interest rates of the many options on the table. While it makes sense to aim for a moderate down payment and hold onto some cash for investments and other purchases, aiming for at least 10% down and a loan maturity under 30 years will save you tens of thousands of dollars in the long run.