40 year mortgages in Australia: repayments, costs and options

An $800k loan at 6% costs about $4,796 a month over 30 years or $4,402 over 40. The longer term frees up about $395 each month, but adds roughly $386k in interest if you keep it for the full term. I'd compare those 2 numbers before deciding whether the lower payment is worth another decade.

That example assumes monthly principal and interest repayments, an unchanged rate and no fees. Longer terms are available in Australia, but the property, loan purpose and your circumstances decide which ones you can use. If the budget only works over 40 years, we'll also test what happens when rates or expenses rise.

You're giving yourself more time to repay the same loan. With principal and interest repayments, each payment covers interest and pays off some of the balance. Over a longer term, less of each early payment generally goes towards reducing that balance.

A lower minimum repayment may give you more room in your monthly budget. The question is what happens to the debt over time. If you expect to retire before the loan ends, or you're using the longer term to buy a more expensive property, work through that plan before committing.

All the repayment and remaining-debt examples below use an $800k loan at an assumed 6% annual interest rate, monthly principal and interest repayments and no fees. We hold the rate steady to show what changing the term does. A lender's actual quote may have a different rate and charges.

The 40 year payment is about $395 lower each month. Over the full term, the interest is about $386k higher. Your actual comparison will change with the rates, fees and any extra repayments offered on each loan.

Compare the same loan amount in both quotes. The lower payment could help your budget now, but you'll also want to know how much more you'll owe when you plan to sell, upgrade or retire.

Here is the same $800k loan at 6%, with monthly principal and interest repayments, no fees and no extra payments. This shows the debt still owing before any selling costs.

After 20 years in this example, the 40 year loan leaves about $182k more to repay. If you sell then, that extra debt comes out of your sale proceeds, leaving less for your next home or retirement. Property growth could change your equity, but it doesn't reduce either loan balance. Use the extra repayment calculator below to test a payment you can maintain.

Here is a selection of longer-term products, checked on 11 September 2026. The term you can get depends on the property, loan purpose and your circumstances.

Ask for quotes using the rate and fees available to you at each term, including any charge for extending beyond 30 years. The 6% example here holds the rate steady to show the effect of the extra years. Actual products may charge different rates.

Possibly, if the lender uses the longer term when testing your ability to repay. If it uses a shorter assessment term, the lower scheduled payment may help your cash flow without increasing the amount it will lend. Income, living expenses, other debts and the assessment rate still matter.

Ask us to show you both figures: the payment you would actually make and the repayment used to assess the application. Our borrowing-power guide explains how living costs affect that calculation.

Interest only repayments are a separate choice. On a 30 year loan with 5 years interest only, you have 25 years left to repay the principal. Those first 5 years usually sit within the total term. They don’t turn it into a 35 year loan. That shorter principal repayment period can mean a bigger payment later.

Using the $800k example above, after 5 years the remaining balance is about $744k on the 30 year loan and $772k on the 40 year loan. You've reduced the debt by roughly $56k or $28k respectively.

Those figures measure debt reduction. The equity in your property also depends on its value, which can rise or fall. A longer term doesn't guarantee that price growth will make a future refinance easy.

If you're planning to sell or upgrade in a few years, estimate the likely remaining loan balance and selling costs. Don't assess the next deposit using the purchase price alone.

If you start a 40 year loan at 35, the scheduled final payment falls when you're 75. That doesn't tell us whether a lender will approve the term. Your expected retirement date, income after work and the product's age rules all need to fit.

Bring your expected retirement date and details of any savings, superannuation or other assets you plan to use. If downsizing is part of the plan, allow for the replacement home and selling costs as well as the debt. Don't depend on an inheritance or future property growth to fill a gap.

Extra repayments can reduce the interest and time in debt if your loan allows them. Check fixed rate restrictions, redraw access and any fees before relying on that flexibility.

On the same $800k loan at 6%, maintaining the 30 year repayment of about $4,796 instead of the 40 year minimum of about $4,402 would clear the debt in roughly 30 years. That's about $395 extra each month, saving around $386k in interest and finishing about 10 years sooner.

Those results assume the same rate throughout, no fees and that you keep making the higher payment. The lower contractual minimum gives you flexibility, but the earlier finish comes from keeping up the extra payments.

Our extra repayment guide explains offset, repayment frequency and regular top-ups. You can also use the calculator below to test a manageable extra amount.

A lower purchase price reduces both the deposit target and the debt. A better rate or lower fees may also improve your budget without adding another decade. Compare those options first.

If the main problem is your deposit, investigate the 5% Deposit Scheme or an eligible LMI waiver. These can reduce upfront requirements, but a smaller deposit means borrowing more of the price. They don't make a large repayment disappear.

A guarantor loan addresses security and deposit requirements. You still need income to make the repayments, and the guarantor takes on a real financial obligation.

If you're refinancing an existing mortgage, compare the proposed term with the years you have left. Moving a loan with 22 years remaining to 40 years is a much larger extension than moving from 30 to 40. Our refinancing guide explains the costs to include.

Bring your income documents, savings, existing debt details and a budget that includes annual bills. For a refinance, include a recent statement showing the balance, rate and remaining term.

We'll show you the minimum payment, the debt remaining at your planned retirement date and the cost of each term. That gives you a clearer way to decide whether the lower payment now is worth the extra time in debt.