In this period of generally rising interest rates, 40 year loans have been introduced to give borrowers more options.

Here are some things to consider:

1. Lower payment

A longer loan term allows for a lower payment. A 40 year loan has a lower payment than a 30 year loan. A 30 year loan for $500,000 at 6% is $2,998, while a 40 year loan with the same terms has a payment of $2,751. This is approximately 10% lower. This can help offset increasing interest rates.

2. Rising interest rates

In a rising interest rate environment, a 40 year loan term is one way to get a lower payment.

3. Interest-only period

Some loans allow for an interest-only period for part of the loan term. This also allows you to make a lower payment. The loan term by itself (30 year, 40 year) doesn