24 Jan 2022

What is the Main Disadvantage of the 40-Year Loan Term for the Buyer?

Loan Term for the Buyer

There are so many disadvantages to 40-year loan terms that it is hard to choose one! The majority of loan terms are 30 years long for mortgages. Although some private companies and banks provide this option, they are few in numbers.

The main disadvantage, amongst the other negatives of a 40-year loan term for buyers, is that the interest a buyer pays increases.

Why does the Interest Increase for the buyer?

40-year loan terms are long! Whether you have a low or high-interest rate, the extra ten years will add money to your original borrowed amount. The interest increases with each month or fortnightly payment, and it is not uncommon to see an individual overpay in just interest alone. 

How to Decrease the Payments Each Month

Don’t worry, though! If you do have a 40-year loan term, there are many things you can do to save yourself some money each month. Some experts recommend, for instance, paying extra payments each month to decrease the years and interest you pay. Once you decrease the number of years you have left, the interest decreases even if the rate stays the same.

How to Lower the Interest Rate of a 40-year Loan Term

Most of the time, people choose a 40-year loan term because the monthly payments are low. This makes it affordable at the moment, but you end up paying a lot more than the original borrowed amount by the end. If the interest rate is high, you can refinance it through a company or bank.

This is a great option for older adults who have a high credit score and reliable bank statements with proof of consistent income. When refinancing, you can also decrease the number of years you have left to pay the loan.


Overall, 40-year loan terms can be frightening and have you overpaying for your home. Although this is an option, not everyone should take it! There is a big disadvantage, which is that the interest-only continues to increase.

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