UBS Says 50-Year Mortgage Would Double Interest Paid Over Time
Homes in Surfside, Florida.
Photographer: Zak Bennett/BloombergA 50-year mortgage on a median-priced US home could reduce borrower’s monthly repayment, but also double the amount of interest the owner pays over the life of the loan, according to UBS Group AG analysts.
The longer mortgage could lower the monthly payment by about $119, or increase an average consumer’s purchasing power by almost $23,000, analysts John Lovallo, Spencer Kaufman and Matthew Johnson wrote in a note on Nov. 10. “However, extending a mortgage from 30 years to 50 years could double the dollar amount of interest paid by the homebuyer on a median priced home over the life of the loan,” they added.