40 year home loans in Australia: repayments, costs and options

You can get a 40 year home loan in Australia. Lenders including Great Southern Bank, Pepper Money and Granite offer them on eligible products. A lower monthly repayment can give you more room in the budget, but keeping the loan for the full 40 years costs much more in interest.

On an $800k loan at an assumed 6.5%, the minimum is about $4,684 a month over 40 years, compared with $5,057 over 30. That's roughly $373 less each month, but about $428k more interest if you only pay the minimum for the whole term.

I'd compare the payment you can manage now with what you'll still owe when you expect to move or retire. The lower minimum is useful only if the rest of that plan works too.

These examples use an $800k loan at an assumed 6.5% a year, monthly principal and interest repayments and no fees. The rate stays the same for the full term. This isolates the effect of the term; it isn't a lender quote.

Going from 25 to 30 years lowers the payment by about $345 a month. Adding another 10 years, from 30 to 40, reduces it by about $373. You get less repayment relief for each extra year, while interest keeps adding up.

Figures are rounded for display, and differences are calculated before rounding. Ask for quotes on the same loan amount and compare the actual rates and fees too.

You have more time to repay the same debt. Each principal and interest payment covers interest and pays back some of what you borrowed. A longer term lowers the payment, so less comes off the balance, especially early on.

After 5 years on the $800k example, you'd still owe about $775k over a 40 year term, compared with $749k over 30 years. You've paid down around $25k instead of $51k.

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The 9 lenders below publish terms of up to 40 years on eligible products. I checked their public information on 29 October 2026. The conditions differ, so a lender offering 40 years doesn't mean every applicant or loan qualifies.

LVR means the loan as a percentage of the property's accepted value. A maximum LVR doesn't cover all your buying costs, and mortgage insurance or other fees can apply.

Not every broker can arrange every lender listed here. We check which options we can arrange and explain where you would need to go directly.

Compare the rate, fees and total cost on your actual quote. A comparison rate uses a standard example loan, so it may not reflect your loan amount or term.

Granite offers the full 40 year term to eligible owner occupiers up to age 45, with shorter terms through age 50. Its public page says those age restrictions don't apply to investors. Retirement and income checks still matter.

Company and trust borrowers are capped at 80% LVR. The extended product has offset, redraw and unlimited extra repayments. Interest only is limited to 5 years for owner occupiers or 10 for investors. Its separate Professional Lender Paid LMI product has a maximum 30 year term. Don't combine that offer with the 40 year product when planning your deposit.

On the same $800k loan at 6.5%, paying only the minimum leaves the balances below. These figures exclude selling costs.

If you sell after 10 years, the 40 year loan leaves about $63k less from the sale after repaying the lender, assuming the same sale price and costs. Property growth can add to your equity, but it doesn't pay down either loan. If you expect to upgrade, work out the remaining debt and selling costs before counting on your next deposit.

It can, if the lender uses the longer term when testing your repayments. If it assesses the loan over 30 years anyway, the lower actual payment doesn't automatically increase your borrowing power.

Granite assesses its extended product over up to 35 years. Bluestone uses 30. AMP uses the remaining principal and interest period, capped at 30 years. Bank of us offers its extended term only where the applicant doesn't meet its 30 year affordability test.

I'd ask two questions: what will you actually pay each month, and what repayment will the lender use to test your application? Your income, living expenses and other debts still decide whether it works.

Start a 40 year loan at 35 and the final scheduled repayment falls around age 75. If the loan runs beyond when you expect to stop working, the lender will want to know how you'll clear what's left.

For an owner-occupied loan, Bluestone requires an exit strategy when the term ends after the earlier of your declared retirement age or age 70. It requires that strategy to be verified if you expect to retire within the next 10 years. Applicants aged 70 or older using an owner-occupied property as security also need independent legal advice.

That plan might involve savings, super or downsizing, if the lender accepts it and the figures work. I wouldn't base it on an inheritance or hoped-for price growth. Tell us when you expect to retire and what you could use to repay the debt, so we can compare terms that fit.

You can if the product allows the extra repayments and you keep making them. A lower minimum can give you flexibility, but it doesn't produce the shorter loan's savings by itself.

On the $800k example, paying about $5,057 a month instead of $4,684 clears the loan in around 30 years and saves roughly $428k in interest. That comparison assumes the same 6.5% rate, no fees, no redraw of the extra payments and no charge or cap on those payments. Different rates or fees change the result.

Fixed rate loans often limit extra repayments. Offset and redraw rules differ too. Our extra repayment guide explains the options, and the calculator below lets you test a regular top-up.

I'd start with a cheaper purchase and a loan with a lower rate or fewer fees. Either could make the budget work without adding 10 years. If you're refinancing, compare the new loan with the years you have left, as well as its repayment. Resetting 22 years to 40 is a big extension.

If the deposit is the obstacle, compare the 5% Deposit Scheme and any LMI waiver you qualify for. These address the upfront cost, not whether you can afford the debt. They also have their own term rules, so don't assume you can combine them with a 40 year loan.

A guarantor loan can help with the deposit or security, but it puts the guarantor's property at risk. Compare that obligation with buying for less or saving longer before asking someone to guarantee the loan.

It can be worth comparing if you qualify for the product, can manage its payments and want a lower minimum while making extra repayments when your budget allows. Buyers early in their careers should still base the decision on income they can show now, rather than a pay rise they hope to receive.

I'd be more cautious if you're within 15 to 20 years of retirement, stretching to a more expensive home or expecting to pay only the minimum. If the budget works only over 40 years, test what happens when rates or living costs rise before you commit.

Send us your income documents, savings, existing debts and a budget that includes annual bills. If you're refinancing, include a recent statement showing the balance, rate and remaining term.

We'll compare the minimum repayments, total costs and the balance you'd still owe when you plan to move or retire. Then you can decide whether the lower payment now is worth keeping the debt for longer.