But one bank has recently been spotted advertising a 35 year loan.
Is that a good thing or a bad thing?
In the near term, you get the immediate benefit of smaller repayments. This can be welcome hip pocket relief if your budget is stretched thin.
But over the long term, you’ll pay more interest on a home loan the longer you have it.
Longer loan terms could come at a high cost to borrowers, reports Property Tribune.
“Extending the loan term drives down the monthly repayment, but at the cost of still having a loan at an older age than originally anticipated,” says Cantstar’s finance expert Steve Mickenbecker.
“The borrower will of course be paying a considerably higher amount of interest.”
So how do you find the right loan for you?
It’s best to talk to an independent financial adviser or independent mortgage broker.
Here are a few points to compare between loans:
- Interest rates
- Ongoing fees
- Loan term
- Redraw or offset facilities (this can reduce the amount of interest you pay)
- Fixed vs variable rates
- Cashback deals
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