New! A 50-year mortgage!
Yes, a 50-year mortgage is now available in California. Statewide Bancorp of Rancho Cucamonga is offering a 5/1 hybrid loan (fixed for 5 years, then converts to an adjustable rate loan), offering the 50-year mortgage as an alternative to an interest-only or payment-option adjustable-rate mortgage ("negative amortization" loan).
As an example, "For a 30-year loan of $300,000 at 6.5 percent, principal and interest cost $1,896.20 per month. A 50-year loan for the same amount and at the same rate costs $1,691.15 per month in principal and interest. The 50-year loan costs $205 less per month, but the payments stretch out for 20 years longer and will cost a total of $332,058 more. An interest-only loan at 6.5 percent would cost $1,625 per month for the first 10 or 15 years, and then the payment would jump."
With home prices these days, consumers may turn to the 50-year mortgage to help them get into a home.
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