40-year mortgages increase long-term borrowing costs in Australia

A growing number of smaller lenders in Australia are now offering 40-year mortgages, extending the typical loan term of 25 to 30 years. This change allows buyers to borrow more and reduces monthly repayments, appealing to those facing high property prices. However, the long-term costs of these loans can be significant. For example, a 40-year mortgage can lead to paying hundreds of thousands more in interest compared to a 30-year loan, raising concerns about financial strain for borrowers. The trend reflects broader issues in the housing market, where many Australians are struggling to afford homes. As more people retire with mortgages, the implications of longer loan terms may add further financial pressure on younger generations.