Wells Fargo Home Mortgage said today it would join the growing club of lenders offering home buyers the option of a 40-year, fixed-rate mortgage.

Wells Fargo is pitching the loan as a tool to bring down monthly payments in areas where home prices have soared, without resorting to an interest-only or option adjustable-rate mortgage, which it says are riskier.

“A 40-year mortgage may be appealing to first-time home buyers, consumers in high-cost markets, real estate investors and buyers on fixed incomes,” said Joe Rogers, executive vice president in Wells Fargo Home Mortgage’s National Consumer Lending Sales division, in a press release.

Wells Fargo says interest rates on a 40-year mortgage are expected to be about a quarter-point higher than rates on a traditional 30-year loan. Stretching the payments out an additional 10 years allows lower monthly payments. But more interest is paid out over the life of the loan, and equity builds more slowly.

In a report last month, PMI Mortgage Insurance Co. warned that 40- and 50-year loans “aren’t right for all borrowers,” but “hold some benefit over more risky alternatives such as piggybacks, IOs and option ARMs.”

The initial monthly payment on a $250,000 home with a 20 percent down payment would be $1,225 with a 30-year mortgage at 6.2 percent and $1,143 with a 40-year mortgage at 6.3 percent, PMI estimated. After five years, the borrower using the 30-year loan would have $67,600 in equity in his/her home — about $7,000 more than with a 40-year loan.

Last year, Weichert Financial Services was among the first to offer 40-year home loans. Today, they are widely available from many large lenders, including Washington Mutual and Bank of America.

More banks began offering the product last year, when Fannie Mae expanded a pilot program in which it had been purchasing 40-year mortgages from 22 credit unions since late 2003. Freddie Mac announced in May that it would offer an array of 40-year fixed-rate mortgages beginning this summer through its Web-based Selling System.

Statewide Bankcorp, a lender based in Rancho Cucamonga, Calif., even offers a 50-year mortgage to California borrowers.

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