40 Year Mortgage. Lower Payments, Long-Term Flexibility

Is a 40-year mortgage available in Australia?

While most Australian home loans run for 25 or 30 years, a few lenders now offer 40-year mortgages, mainly for first-home buyers or borrowers seeking lower initial repayments. These loans aren’t widely available, but they can be explored with help from an experienced broker.

A 40-year term suits younger borrowers with a long working life but comes at a cost, you’ll pay far more interest over time. The key is balancing short-term affordability with long-term expense.

Key considerations:

• Lower repayments: Improves cash flow early on.

• Higher total interest: Extending the term significantly increases total costs.

• Eligibility: Lenders may limit maximum borrower age at loan maturity.

Independent brokers on HeyNest can identify which lenders offer 40-year options and compare them against standard 30-year loans to ensure the trade-offs fit your goals.

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The pros and cons of a 40-year term

A 40-year mortgage lowers monthly repayments, sometimes enough to make a property affordable in high-cost cities like Sydney or Melbourne, but it also extends your debt deep into future decades.

Pros:

• Improved cash flow

• Higher borrowing capacity

• More repayment flexibility

Cons:

• Much higher total interest paid

• Slower equity growth

• Longer debt commitment

A HeyNest broker can model the difference in total interest between 30 and 40 year terms, helping you see the true cost of extended flexibility.

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How to compare 40-year mortgages

Because 40-year terms are niche products in Australia, proper comparison requires expert insight. Brokers look beyond the headline rate to evaluate fees, flexibility and repayment options.

Key comparison points:

• Interest rate: Even small differences add up over four decades.

• Fees: Check setup, ongoing and exit costs.

• Loan features: Offset accounts or redraws help reduce interest.

• Flexibility: Ensure you can make extra payments without penalties.

With HeyNest, you gain access to independent brokers who compare multiple lenders, major banks and smaller institutions, to find long-term solutions that balance lower repayments with financial freedom.

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Frequently asked questions

Does a 40-year mortgage mean I have to take 40 years to pay it off?

No, most loans allow you to make extra repayments to pay off the debt faster than the minimum required 40-year schedule.

Which Australian banks offer a 40-year home loan term?

It's a specialist offering; no single major bank guarantees it. An independent broker is best for finding current lenders.

Is the interest rate higher for a 40 year mortgage?

The rate is typically similar to a 30-year loan, but you pay more interest overall because the debt is outstanding for longer.