Which home loan term could be right for you?
Explore the differences between shorter and longer home loan terms.
Should You Choose a 20, 25, 30 or 40-Year Home Loan?
One of the biggest decisions you'll make when taking out a home loan isn't just which lender to choose—it's how long you want your loan term to be.
Your loan term can have a significant impact on your repayments, borrowing power, financial flexibility and the total amount of interest you'll pay over the life of your loan.
The good news? There isn't a "right" answer. The best loan term is the one that suits your goals, lifestyle and future plans.
Why Your Loan Term Matters
The length of your home loan affects:
Your monthly or fortnightly repayments
How much you may be able to borrow
The total interest paid over the life of the loan
How quickly you'll own your home outright
Your overall cash flow and financial flexibility
As mortgage brokers, we don't just look at getting you approved—we help structure your loan to work for you now and into the future.
Shorter Loan Terms (10–25 Years)
A shorter loan term means you'll repay your mortgage faster.
Because you're paying the loan off over fewer years, your repayments will generally be higher, but you'll pay significantly less interest overall.
Benefits of a shorter loan term:
✔ Pay off your home sooner
✔ Reduce the total interest paid
✔ Build equity faster
✔ Become debt-free earlier
This option often suits borrowers with strong, stable incomes or investors who want to reduce debt as quickly as possible.
Some lenders even offer 10-year loan terms for borrowers looking to accelerate their mortgage repayment strategy.
Longer Loan Terms (30–40 Years)
A longer loan term spreads your repayments over more years, making your regular repayments lower and often improving borrowing capacity.
For many first home buyers, this can be the difference between buying now or waiting several more years.
Benefits of a longer loan term:
✔ Lower regular repayments
✔ Greater borrowing capacity
✔ Improved cash flow
✔ More flexibility for life's changing circumstances
Having lower repayments can also leave room in your budget for renovations, growing your family, investing or simply enjoying more financial breathing space.
Some lenders now offer 40-year loan terms, providing even greater flexibility for eligible borrowers.
Can You Pay Your Loan Off Early?
Absolutely.
Many borrowers choose a 30-year loan because it keeps repayments manageable, then make extra repayments whenever possible.
This approach gives you flexibility—you have lower minimum repayments if life throws you a curveball, but you can still reduce your loan term and save interest by paying extra.
(Always check your loan features and whether any restrictions apply.)
So... Which Loan Term Is Best?
The answer depends entirely on your situation.
When helping our clients choose the right loan structure, we consider things like:
Your income and budget
Future family plans
Investment goals
Career changes
Cash flow requirements
How quickly you'd like to become debt-free
The cheapest interest rate doesn't always mean the best loan—and the shortest loan term isn't always the smartest choice either.
Let's Find the Right Structure for You
Choosing the right home loan is about more than getting approved—it's about creating a strategy that supports your long-term financial goals.
Whether you're buying your first home, upgrading, investing or refinancing, we'll compare hundreds of loan options from a wide range of lenders and help you choose a loan term that suits your lifestyle today and your plans for tomorrow.
Thinking about buying or refinancing? We'd love to help. Contact Nexus Loans today for personalised advice and a home loan strategy tailored to you.
