40-Year Term
"Maximum affordability. Extended timeline."
Stretch payments over 40 years for the lowest possible monthly payment. Ideal for buyers in high-cost areas who need maximum affordability.
5-10%
Min Down
640-680+
Min Credit
$2-3M
Max Loan
Is This Loan Right for You?
This Loan is Perfect If You...
- Need the absolute lowest monthly payment
- Live in high cost-of-living area (CA, NY, etc.)
- Prioritize monthly cash flow over total cost
- Plan to refinance when income increases
- Want to qualify for more expensive home
This Might NOT Be Right If...
- Want to build equity quickly
- Concerned about total interest paid
- Planning to pay off mortgage early
- Prefer shorter-term debt obligations
40-Year Term Benefits
Everything you need to know about your benefits
Lowest Payment
Up to $329/month lower than 30-year on same loan
Qualify for More
Lower payment means you may qualify for a larger loan
High-Cost Solution
Makes expensive markets more accessible
Fixed Option
Lock in your rate for all 40 years
ARM Available
Combine with ARM for even lower initial payment
Refinance Later
Transition to shorter term as income grows
How It Works
Your path to homeownership in just a few simple steps
Assess Your Needs
Determine if maximum cash flow is your priority
Choose Your Rate
Select fixed or ARM option
Get Approved
Non-QM underwriting with flexible documentation
Enjoy Low Payments
Stretch your budget in expensive markets
Assess Your Needs
Determine if maximum cash flow is your priority
Choose Your Rate
Select fixed or ARM option
Get Approved
Non-QM underwriting with flexible documentation
Enjoy Low Payments
Stretch your budget in expensive markets
Types of 40-Year Term
Choose the option that fits your situation
40-Year Fixed
Same rate and payment for all 40 years. Ultimate stability for long-term planning.
40-Year ARM
Start with a lower rate for 5-10 years, then adjusts. Lowest possible initial payment.
Things to Consider
A reverse mortgage is a significant financial decision. Here's what you should understand before proceeding.
Limited Availability
40-year terms are offered through select Non-QM lenders, not all lenders offer this product.
Slightly Higher Rates
Interest rates may be 0.25-0.50% higher than comparable 30-year loans.
Not Government-Backed
This is a Non-QM product, not eligible for FHA, VA, or conventional conforming guidelines.
HUD-approved counseling is required to ensure you fully understand these factors before proceeding.
Monthly Payment Savings
| Feature | 30-Year | 40-Year(This loan) |
|---|---|---|
| Monthly P&I | $3,327 | $2,998 ✓ |
| Monthly Savings | — | $329/month |
| Annual Savings | — | $3,948/year |
| Loan Term | 30 years | 40 years |
| Total Interest | ~$698K | ~$939K |
| Best For | Equity building | Cash flow priority |
* Rates and terms subject to change. Contact us for current offers.
Frequently Asked Questions
Common questions about 40-Year Term
Last updated:
Who offers 40-year mortgages?
40-year mortgages are offered through select Non-QM (Non-Qualified Mortgage) lenders. They are not available through Fannie Mae or Freddie Mac conforming programs. CMS Mortgage works with multiple Non-QM lenders who offer this extended-term option.
How much can I save with a 40-year mortgage?
On a $500,000 loan at 7%, you would save about $329/month compared to a 30-year term ($2,998 vs $3,327). That is nearly $4,000/year in cash flow. The trade-off is you will pay more total interest over the life of the loan.
What are the downsides of a 40-year mortgage?
The main trade-offs are: (1) Higher total interest paid over the life of the loan, (2) Slower equity building since more of your payment goes to interest, and (3) Slightly higher interest rate than 30-year loans. It makes sense when cash flow is your priority.
- Yes! There are no prepayment penalties. You can make extra payments anytime to build equity faster. Many borrowers start with a 40-year for the low payment, then refinance to a shorter term as their income increases.
- Most lenders require a 640-680+ credit score for 40-year terms. Since this is a Non-QM product, requirements may vary by lender. Down payment requirements are typically 5-10% depending on your credit profile.
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