Mega mortgages: 1 in 3 Aussies would take out a 40-year home loan
Australians are being warned to consider the long-term financial implications of mega mortgages before applying, according to new research by Finder.
A Finder survey of 1,013 respondents revealed 30% of Australians – equivalent to 6.2 million people – would take out a 40-year home loan if it reduced their monthly repayments to a more affordable level.
Four lenders currently offer 40-year mortgages in Australia – three of those exclusively to first home buyers, Finder analysis shows.
The average home loan size in Australia reached a record high of $641,416, according to data from the Australian Bureau of Statistics (ABS, September 2024).
That's up by 37% from September 2019 when the average home loan size in Australia was $467,403.
Graham Cooke, head of consumer research at Finder, said paying your mortgage from now until 2065 has pros and cons.
"Owning a home has felt out of reach for an increasing number of Aussies.
"A 40-year loan can help some buyers get into the market sooner by reducing monthly repayments.
"While these loans may have lower monthly repayments, they typically end up costing a lot more over time."
Finder analysis shows that while the monthly repayment for the average Australian loan of $641,416 would drop by over $300 on a 40-year loan compared to an identical 30-year loan, the full repayment would cost the borrower $316,000 more.
"Essentially, these loans give you a reduction in your monthly cost in exchange for a significant increase in the cost of your mortgage overall.
"Borrowing costs and house prices have combined to make the housing market less affordable for many Aussies.
"While 40-year loans do offer a lower cost route to getting your first foot on the housing ladder, staying with them until the end can be very expensive."
Cooke said competition was returning to the home loan market.
"I naively took out a 40-year loan when purchasing my first apartment, only to quickly realise how costly it would be in the long run. Fortunately, I was able to sell the apartment a few years later.
"The good news for those struggling is that what goes up must come down, and the cash rate has now fallen – welcome relief for those who have overextended themselves.
"Before extending your loan term to ease cash flow pressure, consider refinancing to a cheaper variable rate first."
Would you take out a 40-year home loan if it reduced your repayments to a more affordable level?
| Yes | 30% |
| No | 70% |
| Source: Finder survey of 1,013 respondents, January 2025 |  |
Methodology
- Finder's Consumer Sentiment Tracker is a monthly recurring nationally representative survey of more than 60,000 respondents.
- Figures in this release are based on 1,013 respondents from January 2025.
- The Consumer Sentiment Tracker is owned by Finder and operated by Qualtrics.
- The survey has been running monthly since May 2019.
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