<div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Refinancing your </span><a href="http://www.9news.com.au/mortgages" rel="" target="" title="mortgage"><span>mortgage</span></a><span> for a lower interest rate could cost more in the long run if you extend the life of the loan, mortgage experts have warned.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>A survey has found nearly half (47 per cent) of all Aussies who refinance their mortgage opt to extend their loan term and this could cost them more than $100,000 in additional interest.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Alarmingly, 8 per cent of surveyed homeowners weren't even aware their loan term had been extended to 30 years.</span></div></div><div><div id="adspot-mobile-medium"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE:</span></strong><span> </span><a href="https://www.9news.com.au/national/food-and-water-shortages-predicted-for-australia-in-national-climate-risk-assessment-report/c0c4dfdf-36f8-406e-98ea-2935e5173980" target="_blank"><strong><span>Aussie staples under threat of being wiped out in just decades</span></strong></a></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"Yes, it feels like a win because it reduces monthly repayments, but it's really a false economy," money.com.au mortgage expert Debbie Hays said.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"You may save a few hundred dollars a month now, but you're signing up for tens of thousands in extra interest over time and adding back years to your loan when the goal is generally to pay it off sooner."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>For example, if a $600,000 loan at 5.7 per cent p.a with 25 years left on the loan was refinanced to 5.5 per cent p.a but extended to a 30-year loan term, the repayment would drop by $349 a month but the mortgagee would pay an additional $121,067 more interest than if they had taken the new reduced rate but kept their 25-year loan term.</span></div></div><div><div class="OUTBRAIN" data-reactroot="" data-src="//www.9news.com.au/national/refinancing-mortgage-trap-lower-interest-rate-longer-loan-term-interest-payments-cost-of-living-news/9f7a1024-e850-499b-bc69-4de35ad2e9a1" data-widget-id="AR_5"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"Resetting the clock on your home loan back to 30 years in some instances only really benefits the banks, and not the borrower," Hays said.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>But if you're a family in a cost-of-living pinch, sometimes short-term savings are absolutely necessary.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>In this case, Hays said there's no need to panic.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"Resetting your home loan to 30 years to lower monthly repayments can provide essential breathing space in the short term," she said.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"They can then make extra repayments later when they're in a stronger financial position."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Extending the loan term can also be a worthwhile strategy for investors, making interest-only repayments and retaining debt for tax purposes.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The key is to consider the implications over the entire loan term, not simply the monthly repayment amount, when you refinance.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The survey was conducted by Pureprofile for money.com.au and included a nationally representative sample of 1000 Australians by gender, age, and location.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><em><span>The information provided on this website is general in nature only and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information on this website you should consider the appropriateness of the information having regard to your objectives, financial situation and needs.</span></em></div></div>