CHICAGO — Just 600 monthly payments, and the house is all yours.

Recoil, if you will, at the thought of a 50-year mortgage, but it's here.

A California mortgage company began to offer the loans in March to considerable media hoopla and touted them as a lifeline to consumers trying to squeeze into that state's ultra-pricey housing market.

The loans haven't caught on in a huge way, though a handful of lenders now offer them, and they are available nationwide.

Critics dismiss them as a poor choice or a marketing gimmick. But some in the industry say 50-year mortgages are finding their niche, and it may be just a matter of time before they are common. "We felt the loan would fill a need for some people to keep their payments lower," said Alex Diaz Jr., vice president of Statewide Bancorp, a mortgage company in Rancho Cucamonga, Calif.

SMALL PART OF ACTION

In the second quarter, State-wide originated about $92.1 million in 50-year loans in five states, Diaz said. That's a minuscule portion of the industry's $700 billion in all mortgage originations in the period.

So far, most of the loans are in California, though a few lenders are marketing them nationally to sub-prime borrowers who have spotty credit histories and are likely to pay higher interest rates.

"This is not a product that has been taking the world by storm," said Doug Duncan, chief economist for the Mortgage Bankers Association, a trade group in Washington, D.C. "From a statistical perspective, they are practically nonexistent."

Mega-lenders such as Wells Fargo and Countrywide say they have no plans to make 50-year loans. And they say the loans will not get traction until they become widely sold in the secondary market, as most mainstream mortgages are. Mortgage financiers Fannie Mae and Bear, Stearns & Co. said recently that they have no plans to buy the 50-year mortgages from lenders.

Just give them time, say some in the industry.

"I don't see any objections to Fannie and Freddie (Mac) buying the product," said Terry King, who follows loan trends for MRG Document Technologies, a Dallas firm that provides support services to the mortgage industry. "Let it pick up speed. It's got momentum on the East and West coasts.

"I predict that (Fannie Mae and Freddie Mac) will adopt the loans by the end of the year."

Most of the 50-year loans, so far, aren't really "50-year loans," fixed-rate products for which the borrower would make a set payment every month for a half-century.

Instead they are adjustable-rate mortgages, or ARMs, in which the monthly payments remain the same for a certain period, then reset and fluctuate with prevailing interest rates, amortized over a 50-year term.

Statewide originally offered them as five-year ARMs, but now also packages the loans as two-, seven- and 10-year ARMs. Recently it began to make 50-year, fixed-rate loans, Diaz said.

"That (50-year-fixed) is for somebody who is looking for the safety of knowing that the payments will never change," Diaz said.

Diaz also said the 50-year loans are a better bet than the similarly popular interest-only loans because, with the former, the borrower at least builds some equity.

But critics abound.

"They're asinine," said Jack M. Guttentag, professor of finance emeritus at the Wharton School at the University of Pennsylvania, who now runs a mortgage-information Web site.

"I tell people to ignore them," Guttentag said. "Given the wide availability of interest-only loans, going out beyond 30 years seems senseless. You are paying more for the loan and getting a very small reduction in the payment."

RISK OF RESETTING

At the very least, ARMs carry a risk of resetting at an uncomfortably or sometimes unaffordably high rate, which should be a concern for borrowers who are only marginally able to buy, critics say. They say the loans do not cut the monthly bill by much. And the interest paid over the life of the loan is eye-popping.

For example, with a 30-year loan for $275,000 set up as a five-year ARM at an interest rate of 6.58 percent, the monthly payment would be $1,752.68, said Keith Gumbinger, vice president of HSH Associates, a mortgage-industry publisher in Pompton Plains, N.J.

Gumbinger assumes that such an ARM in a 50-year form would have an interest rate a quarter point higher.

So, at 6.83 percent, the monthly payment would be about $1,618.95, a monthly cash-flow savings of about $133.73, he said.

But the "gulp" comes in the interest paid over the term of the loan. For the 30-year loan, it would be $87,826.66, he said. For the 50-year, it would be about $93,306.32.