On this page
- Can you get a 40 year mortgage? What the law says
- Who offers a 40 year mortgage
- What a 40 year mortgage costs compared with 15- and 30-year loans
- Other ways to lower your mortgage payment
- Where a 40-year term does show up: loan modifications
- 40 year mortgage FAQ
- Compare a 30-year quote before you decide
You can get a 40 year mortgage, but few lenders offer one. Federal rules cap a qualified mortgage at 30 years, and FHA, VA, USDA, Fannie Mae and Freddie Mac loans also stop at 30 years for a purchase or refinance. As a result, the lenders that offer a 40-year term are non-QM or portfolio lenders.
The tradeoff is steep. On a $300,000 loan at 7.24%, a 40-year term lowers the monthly principal and interest payment by about $128 compared with a 30-year loan. However, it adds about $184,000 in interest over the life of the loan.
Can you get a 40 year mortgage? What the law says
A qualified mortgage cannot run longer than 30 years
The Consumer Financial Protection Bureau’s Regulation Z defines a qualified mortgage (QM), a loan that meets a set of federal product rules. Under 12 CFR 1026.43(e)(2)(ii), a QM’s loan term may not exceed 30 years. A mortgage with a 40-year loan term is therefore not a qualified mortgage. Balloon-payment QMs face the same cap, because their payments must be based on an amortization period of 30 years or less (1026.43(f)). The CFPB’s qualified mortgage explainer also lists terms longer than 30 years among the features a QM cannot have.
The QM rule no longer sets a flat 43% debt-to-income (DTI) limit, although older articles still cite one. The 2021 General QM amendments, mandatory for applications received on or after October 1, 2022, replaced that limit with a price test. Under that test, the loan’s annual percentage rate (APR) is compared with the average prime offer rate, a benchmark rate for similar loans (1026.43(e)(2)(vi)).
DTI limits now vary by loan program and by lender underwriting. USDA, for example, uses ratios of 29% for housing costs and 41% in total (HB-1-3555, chapter 11). Our guide to debt-to-income ratio limits shows what each program allows.
FHA, VA, USDA and conventional loans stop at 30 years
Each major program caps the term at about 30 years:
- FHA: The mortgage term may be no more than 30 years from the start of amortization (24 CFR 203.17(d)).
- VA: A home loan’s maturity may be no more than 30 years and 32 days (38 U.S.C. 3703(d)(1) and VA Pamphlet 26-7, chapter 3).
- USDA: A guaranteed loan’s term may not exceed 30 years (7 CFR 3555.104(b)).
- Freddie Mac: The original term of a mortgage it buys must not exceed 30 years (Guide section 4201.3, effective February 4, 2026).
- Fannie Mae: Its 30-year fixed-rate securities take loans with original terms of no more than 360 months (Selling Guide C3-4-01).
So if a loan officer offers you a 40-year purchase loan, it is a non-QM or portfolio product.
A non-QM loan still has to be one you can repay
A non-QM loan is a legal loan that falls outside the QM definition. The lender still has to make a “reasonable and good faith determination” that you can repay it, under the ability-to-repay rule in 1026.43(c). What the lender gives up is the QM legal protection: a safe harbor, or a presumption that it followed that rule (1026.43(e)(1)).
That extra legal risk, plus the fact that Fannie Mae and Freddie Mac will not buy the loan, helps explain why few lenders offer a 40-year term.
Who offers a 40 year mortgage
Most lenders that offer 40-year terms are non-QM lenders or portfolio lenders. A portfolio lender keeps the loans it makes on its own books instead of selling them. Some banks and credit unions also offer a 40-year term in their own loan programs. Our guide to non-QM loans explains how these programs work and who qualifies.
Some 40-year products are jumbo loans, which are larger than the 2026 conforming limit of $832,750 for a one-unit home in most counties. Other non-QM programs pair a 40-year term with an interest-only period at the start. During that period your payment covers only interest, so the balance does not fall at all.
What lenders usually ask for
Terms vary by lender, so read the disclosures for the specific loan you are offered. In general, expect:
- A larger down payment than an FHA or conventional loan requires.
- A higher minimum credit score.
- A higher interest rate than a 30-year qualified mortgage.
- Cash reserves, meaning several months of payments left in the bank after closing.
- Stricter rules for investment properties, where a prepayment penalty can apply.
For a home you will live in, Regulation Z allows a prepayment penalty only on certain fixed-rate qualified mortgages (1026.43(g)). A 40-year loan on your own home therefore should not carry one. In contrast, a loan to buy a rental you will not occupy counts as business credit under Regulation Z (comment 3(a)-4), and some of those loans do carry penalties.
Questions to ask before you apply
- What is the interest rate, and what is the APR?
- Is the rate fixed for the full term, or can it adjust?
- Does the loan start with an interest-only period, and how long does it last?
- Is there a prepayment penalty?
- How many months of reserves do you need?
- Will the lender keep the loan or sell it, and who will service it?
What a 40 year mortgage costs compared with 15- and 30-year loans
The table compares a $300,000 loan over three terms. It uses the same rate for all terms, to compare the terms: 7.24%, Freddie Mac’s 30-year fixed average on October 29, 2026. In practice, a 15-year loan usually has a lower rate, while a non-QM 40-year loan usually has a higher one.
| Term and rate | Monthly principal and interest | Total interest over the full term | Balance after 10 years |
|---|---|---|---|
| 15 years at 7.24% | $2,736.90 | $192,642 | $137,432 |
| 30 years at 7.24% | $2,044.49 | $436,018 | $258,872 |
| 40 years at 7.24% | $1,916.82 | $620,072 | $281,265 |
| 40 years at 7.99% (hypothetical, if the lender charges 0.75 percentage point more) | $2,083.68 | $700,168 | $284,242 |
Assumes a $300,000 fixed-rate loan with every payment made on schedule. Payments are principal and interest only, so they exclude property taxes, homeowners insurance and mortgage insurance. These figures are illustrations only.
For a closer look at the two most common terms, see 15-year vs. 30-year mortgage. Rates change every week, so check current mortgage rates before you run your own numbers.
The payment drops only about $128 a month
At the same 7.24% rate, the 40-year loan saves about $128 a month compared with the 30-year loan. Say a borrower earns $8,000 a month. That saving lowers their DTI ratio by about 1.6 percentage points, which may not fix an application that is over a lender’s limit.
The saving can also disappear. At the hypothetical 7.99% rate, the 40-year payment is about $39 higher than the 30-year payment. Before you stretch the term, check how much of your income should go to a mortgage.
Total interest climbs by about $184,000
Over the full term, the 40-year loan at 7.24% costs $620,072 in interest. That is $184,054 more than the 30-year loan at the same rate. At 7.99%, the gap grows to about $264,150.
Equity builds slowly
After 10 years of payments on the 40-year loan at 7.24%, you would still owe $281,265. In other words, you would have paid down only $18,735, or about 6% of the loan. The 30-year borrower would have paid down $41,128 over the same period. In fact, $1,810 of the first $1,916.82 payment on the 40-year loan goes to interest.
That matters if you might sell. The typical seller had owned the home for 11 years, according to the NAR 2025 Profile of Home Buyers and Sellers, which surveyed transactions from July 2024 to June 2025. A 40-year borrower who sells on that timeline would still owe most of the original balance.
Other ways to lower your mortgage payment
If your goal is a smaller payment, these options often cost less than a 40-year term:
- Put more down. A smaller loan lowers the payment at any term. Down payment assistance programs may help.
- Shop for a lower rate. Compare Loan Estimates from several lenders on the same day.
- Buy discount points. Points paid at closing lower your rate, so check the break-even point. See whether discount points are worth it.
- Take a 30-year loan and prepay later. Extra principal payments cut total interest without raising your required payment. Here is how prepayments save you money.
- Look at a less expensive home. A lower price shrinks the loan and the payment.
- Try a different program. FHA, VA or USDA loans may allow a smaller down payment or different DTI limits.
- Add a co-borrower. A second income can lower your DTI ratio.
Where a 40-year term does show up: loan modifications
Agency loans use 40-year terms in one place: modifications for homeowners who face a hardship. HUD Handbook 4000.1 (section III.A.2.i.v) lets an FHA servicer re-amortize the balance over 360 or 480 months. The servicer must review a 40-year modification when a 30-year one cannot cut the principal and interest payment by 25%. Similarly, Fannie Mae’s Flex Modification can extend the term to 480 months, and USDA allows up to 40 years (7 CFR 3555.304).
These options help an existing owner keep the home. You cannot use them to buy a house. If you are behind on payments, call your servicer and read our guide to a mortgage repayment plan.
40 year mortgage FAQ
Can you get a 40 year mortgage?
Yes, from some non-QM and portfolio lenders. A 40-year term cannot be a qualified mortgage, because Regulation Z caps the QM term at 30 years. FHA, VA, USDA, Fannie Mae and Freddie Mac loans also stop at 30 years.
Who offers 40 year mortgages?
Non-QM lenders, portfolio lenders and some banks and credit unions offer them. Ask each lender whether it offers a 40-year term, then compare Loan Estimates.
Are there 40 year FHA or VA loans?
Not for a purchase or refinance. FHA caps the term at 30 years, and VA caps it at 30 years and 32 days. However, FHA does allow a 40-year term in a loan modification for a borrower with a hardship.
Is there a mortgage longer than 30 years?
Yes, but only outside the QM rules. Any term longer than 30 years, including 45 or 50 years, cannot be a qualified mortgage under Regulation Z.
Can I get a 40 year mortgage with bad credit?
It is unlikely. Lenders that offer 40-year terms usually ask for higher credit scores and larger down payments, although requirements vary by lender. A borrower with weak credit may have more options with an FHA loan.
Is a 40 year mortgage a good idea?
For most budgets, the numbers are hard to justify. In the example above, the payment falls about $128 a month, while total interest rises by about $184,000. After 10 years, the borrower still owes $281,265 of the original $300,000.
Compare a 30-year quote before you decide
A 40-year term buys a small payment cut at a high long-term price, and it moves you into non-QM lending with stricter terms. Before you apply, get a 30-year quote on the same day and compare the payment, APR and 10-year balance. If the gap is small, one of the other payment fixes above may serve you better.
