Average Mortgage for 40‑Year‑Old Australians in 2025

How much can a 40-year old borrow?

At 40, your borrowing power depends on how comfortably you can repay the loan before retirement. Lenders focus on serviceability rather than age alone. Main factors:

• Income and job stability: Higher, stable income = higher borrowing capacity.

• Existing Debts (DTI): Car loans, cards and personal loans reduce what you can borrow.

• Deposit size: Bigger deposits lower your LVR and can unlock better rates and terms.

• Living expenses: Higher ongoing spending means less capacity for repayments.

• Loan term: You may be offered a shorter term (25 years), which raises repayments and can slightly reduce your maximum loan size.

Lenders are stricter with older applicants to ensure loans are repaid well before retirement. HeyNest connects you with an independent broker who understands these rules and helps you maximise your borrowing potential as a 40-year-old in Australia.

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Factors affecting your mortgage interest rate

Your interest rate heavily influences the total cost of your mortgage and it varies by lender and your profile. Key drivers:

• Credit score: Higher scores usually qualify for sharper rates.

• LVR: Under 80% is ideal, often avoiding LMI and accessing premium pricing.

• Loan purpose and type: Owner-occupied loans and some variable rates are typically cheaper than investment or certain fixed products.

• Negotiation: Banks rarely lead with their best rate, strong negotiation can lower it further.

HeyNest matches you with a broker who compares multiple lenders and negotiates a competitive rate tailored to your situation as a 40-year-old borrower.

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Access to many lenders

Compares and negotiates the best market rates for you.

Dedicated, personalized guide every step of the way.

Only offers their own limited products.

Standard, often non-negotiable in-house rates.

Standardized service; often no single dedicated contact.

Tips to improve your mortgage application at 40

At 40, you can use your financial track record to your advantage if you present it well. Practical steps:

• Clear high interest debts: Especially credit cards and small personal loans.

• Tidy up spending: Keep 3-6 months of clean bank statements with sensible, consistent spending.

• Boost your deposit and buffer: Aim for more than 20% if possible and keep extra savings aside.

• Get organised: Have payslips, tax returns and statements ready and up to date.

• Consider a co-borrower: A partner or family member with solid income can lift borrowing capacity.

A strong, well-presented application makes approval smoother and terms better. Through HeyNest, a broker can guide you step-by-step so your application shows you in the best possible light.

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Frequently asked questions

Does being 40 affect my maximum loan term?

Yes, while a 30-year term is often possible, lenders may request evidence that the loan can be repaid before standard retirement age (65-70).

What is the main advantage of applying for a mortgage at age 40?

Many 40-year-olds have established higher incomes, better credit histories and larger deposits compared to first-time buyers in their twenties.

Should I fix my rate or use a variable rate at this age?

It depends on your personal financial stability; a fixed rate offers repayment certainty, which is valuable for budgeting in the run-up to retirement.