Change Loan Term
How term changes affect repayments and total interest.
Loan term is one of the most under-used levers in a home loan. Cutting a 30-year loan back to 25 years, or lifting a demanding term back to 30 for cashflow relief, can materially change both the monthly repayment and the total interest paid over the life of the loan.
Things to consider
- A shorter term raises the monthly repayment but slashes total interest — check serviceability.
- Extending a term lowers the monthly figure but usually raises total interest — sometimes worth it for cashflow, but not by default.
- You often don't need to formally shorten the term — just paying above the minimum has the same effect.
- Some lenders charge fees to formally change the term — an informal extra-repayment approach can be equivalent.
Related equity uses
Three more ways homeowners commonly put usable equity to work.
Remove an Ex from the Loan
The steps, costs and assessments involved in changing borrowers.
Tax Debt or ATO Bill
Why moving ATO debt into a home loan needs careful comparison.
Kitchen Renovation
What to weigh before adding renovation costs to your home loan.
Explore whether using your home loan for this purpose may be appropriate — a Mortgage Freedom Review can help you understand the potential effect on repayments, total interest and your estimated mortgage-free date before you decide.
Results are estimates based on the information provided and stated assumptions. Savings, rates, approval and earlier repayment are not guaranteed. Credit approval, valuation, lender criteria, fees and product terms apply. Refinancing may not be suitable for everyone.
Submitting an initial enquiry for a Mortgage Freedom Review does not itself lodge a loan application. If a credit report or formal application may be required later, the responsible mortgage broker will explain the proposed step and obtain the necessary authority or consent.