Traditionally, home loans in Australia have 30-year terms. However, many clients today are interested in applying for 40-year mortgages. While this is not a standard loan term, it is available through some lenders.
Types of 40-year mortgages that are available for your client
There are three types of home loans that offer 40-year loan terms:
- Variable Rate Home Loans offer flexible rates that you can negotiate in some cases.
- Package Home Loans may come with additional incentives and rate discounts, especially on 40-year mortgages.
- Low Doc Home Loans are great if your client is self-employed or has a lot of investments. However, they do come with higher interest rates.
Benefits of a 40-year Mortgage
Like any other loan term, the 40-year mortgage has significant benefits for your client:
- They will have lower monthly repayments
- They can buy a larger house even if they have a small income because they can afford to make the monthly repayments
- They will have more money left over after making the monthly repayments that they can spend, invest or save to increase their financial situation and standard of living.
- Most 40-year mortgages are variable interest rates, allowing your client to take advantage of the excellent market conditions when they pop up.
What to consider when comparing mortgages for your client
As a mortgage broker, you need to act in your client’s best interests. You need to find a 40-year mortgage that fits their current budget, their plans and doesn’t have hidden fees or early repayment fees.
If your client wants to apply for a 40-year mortgage, consult with us. Mortgage Street is a non-bank lender. We can ensure that your client’s interest rate is the lowest possible rate over their 40-year loan term, allowing them to save money. If they can’t secure a 20% deposit, we can also help them find a loan that isn’t subject to lender’s mortgage insurance, saving them thousands of dollars over 40 years.