Which home loan term could be right for you?

Explore the differences between shorter and longer home loan terms.

Robyn Slater05 Sep 2025 ・ 2 min read

Home loans

When applying for a home loan, deciding on the loan term is an important part of the process.

Whether you’re a first homebuyer or seasoned investor, understanding the differences between shorter and longer loan terms could help you make a more informed choice.

Why is the loan term important?

Your loan term affects more than just how long you’ll be repaying your mortgage. It can also influence how much you can borrow, your monthly repayment amount and the total interest you’ll pay over the life of your loan.

That’s why it’s worth exploring your options and weighing up the benefits of shorter or longer loan terms.

Shorter loan terms

Opting for a shorter loan term, such as 20 or 25 years, typically means higher monthly repayments. However, it could also mean you pay less interest overall and own your home sooner.

Certain lenders offer 10-year loan terms, including Liberty, to give you the flexibility to pay off your loan faster and reduce your total interest costs.

This option could suit investors who have built equity in a previous property and are comfortable with making larger repayments.

Longer loan terms

A longer term, such as the standard 30 year-term, could make repayments more manageable which may be helpful for first homebuyers looking to enter the market sooner.

While you may pay more interest over time, lower monthly payments could free up cash flow for other priorities like renovations, travel or starting a family.

Some lenders, like Liberty, even offer 40-year loan terms to give borrowers greater flexibility and choice.

Finding the right fit

Home loan terms aren’t one-size fits all. The right loan term for you will depend on your personal circumstances, so it’s important to align your home loan with your goals.

A lending expert, like a Liberty Adviser, can help you explore your options and find a solution that works for you.

Looking to take the next step? Speak with your local Liberty Adviser today for personalised support with your property plans.

Robyn SlaterAuthor

Robyn Slater is a writer for Liberty with a passion for simplifying complex concepts using clever copy. She enjoys playing social netball and keeping up to date with all things pop culture. Robyn is currently completing a Bachelor of Business at Deakin University.