How Long Can You Get a Home Loan For?

With massive increases in home prices and higher interest rates, some officials have been talking about offering 50-year mortgages to help more people become homeowners. 

Currently, the discussion about 50-year mortgages is just an idea. Most traditional home loans last for 30 years, although some are shorter. How do longer loan terms affect mortgage payments, and how long can you get a home loan for? Here’s everything you need to know. 

How long can you get a home loan for?

It’s hard to get a home loan for longer than 30 years. The most common mortgage durations in the United States are:

• 15 years
• 20 years
• 30 years

Some specialized lenders offer 10-year or 40-year mortgages, although both options are rare. 

The term of your mortgage is simply the number of years you will take to repay the loan. A longer term typically means lower monthly payments and higher total interest paid over time. If you opt for a shorter term, your monthly payments will be higher, but you can save tens of thousands of dollars in interest. 

Typical mortgage term lengths

Here’s how common mortgage terms generally compare:

• 30-Year Mortgage: The most popular option that offers lower monthly payments because the loan is stretched over three decades 
• 15-Year Mortgage: Payments are higher, but interest rates are often lower 
• 20-Year Mortgage: A middle-ground option that may be a good fit for some buyers 

When you inquire about a mortgage, the lender will most likely give details for a 30-year term. However, you can ask them to compare your potential monthly payment based on a 15-year or 20-year mortgage so you can decide which approach best fits your budget. 

Adjustable-rate vs. fixed-rate mortgage durations

How long can you get a home loan for? Mortgages typically last 15 to 30 years. However, there is another important thing to understand before you get a home loan: the difference between fixed-rate and adjustable-rate mortgages (ARMs).

With a fixed-rate loan, your interest rate stays the same for the entire term. ARMs typically have an initial fixed rate period, such as:

• 5/1
• 7/1
• 10/1

The first number indicates how many years the interest rate is fixed, and the second number indicates how often the rate fluctuates after the initial period. For example, in a 5/1 ARM, the rate is the same for five years and adjusts annually after that.  

How term length affects monthly payments

Your loan term will affect your monthly payments. A shorter loan term may sound appealing, but it could also push becoming a homeowner out of reach. 

For example, suppose that you apply for a $300,000 loan. A lender offers you two choices: a 30-year mortgage at a higher interest rate, with payments spread over 360 months, or a 15-year loan at a lower rate, with payments spread over 180 months.

The 15-year loan would save you money overall. However, since the timeline is shorter, the monthly payments might be more than you can afford.

How good credit lowers costs

Your credit score plays a major role in determining your interest rate. Even with the same loan term, someone with strong credit may qualify for a lower rate than someone with poor credit. A lower interest rate means:

• Lower monthly payments
• Less interest paid over time
• Ability to purchase a more valuable home

If your credit profile needs a boost so you can unlock these perks, focus on making payments on time and reducing debt. 

Conclusion

All of the major credit scoring models consider payment history when calculating your score. If you want a higher score, you need to make consistent, on-time payments. Kikoff can help you do that with payment reporting services. 

With Kikoff, you can report verified rent payments to Equifax, which means that you can build your credit using bills you already pay. Over time, this can have a positive impact on your credit score, making you more appealing to lenders when applying for a mortgage. 

Add positive payment history to your credit profile with Kikoff.