A small number of Australian lenders offer 40-year home loans, while most cap the term at 30 years. A longer term lowers the repayment: on $600,000 at 6%, it falls from about $3,597 to $3,301 a month. The cost is time and interest: about $290,000 more over the life of the loan. It can lift borrowing power slightly.

$600,000 at the 6% example rate
Term Monthly repayment Total interest
30 years $3,597 $695,029
40 years $3,301 $984,615

Who offers 40-year loans?

A few lenders, mainly smaller banks and non-bank lenders, have offered 40-year terms, usually for owner-occupiers, sometimes only for first home buyers or new loans. They are less common than 30-year loans, and the rate and features may not match the best 30-year options.

How much does a longer term help borrowing power?

Less than people expect. Because interest dominates the repayment at a 9% assessment rate, stretching from 30 to 40 years reduces the assessed repayment only a little. On the site’s model, a single applicant on $100,000 could borrow about $424,000 over 30 years and about $442,000 over 40, roughly $18,000 more. Some lenders also assess over a shorter period than the loan term.

What if you take 40 years but pay as if it were 30?

Then a long term works as a safety net. If you pay the 30-year amount of about $3,597 a month on a 40-year loan at 6%, the extra $296 a month goes off the balance and the loan finishes in about 30 years, with interest close to the 30-year figure. You keep the option to drop back to the lower minimum if money gets tight, such as during parental leave. The discipline has to be yours, because the lender only asks for the minimum.

What about age and exit plans?

A 40-year loan taken at 35 runs to 75. Lenders must consider whether you can repay, so if the term runs past your likely retirement, expect questions about how the loan will be cleared, such as downsizing or super. The home loans for retirees article explains exit strategies.

When can a long term make sense?

  • When lower minimum repayments give breathing room in early years, and you plan to pay extra later.
  • When paired with an offset account, so savings cut interest while repayments stay low.
  • When the alternative is a loan that only just fits.

The key is not to stay on the minimum. The article on paying off your home loan faster shows how extra repayments shorten any term.

What are the alternatives?

A 30-year loan with an offset, a guarantor to reduce the loan, a smaller purchase, or a scheme that cuts costs such as the 5% Deposit Scheme. Some borrowers use interest-only for a short period instead, which has its own risks; see interest-only home loans.

Questions people ask

Are 40-year mortgages available in Australia?

From a small number of lenders. Most offer up to 30 years.

Is a 40-year loan a good idea?

It lowers repayments but adds a lot of interest. It suits people who will pay extra when they can, not those who plan to stay on the minimum.

Can I refinance a 30-year loan to 40 years?

Sometimes, with a lender that offers it and if you qualify. It resets the term, so the total interest usually rises.

Charles Touma compares a longer term with other ways to make repayments fit, so you see the full cost. A free 30-minute call covers it. General information only, not credit advice. Example figures use the 6% example rate.

Sources: ASIC, Regulatory Guide 209; Moneysmart, home loans, checked 18 October 2026.

General information only, not credit, legal or tax advice. Your situation is assessed properly before any recommendation. Government scheme details change; figures are current at the time of writing.