Here’s What to Consider First Before Extending Mortgage Terms To Lower Payments
Written by
Cynthia Measom
Edited by
Angela Corry
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Approximately 73% of homeowners plan to extend their mortgage terms in 2025 to lower their monthly payments, according to a REsimpli survey. While the challenges of high home prices and interest rates make this strategy a workable path to affordable homeownership, extending a mortgage loan also has drawbacks.
Here are the good and bad outcomes experts say to consider before changing the terms of your mortgage.
Advantages of Extending Mortgage Terms
Although 15- and 30-year mortgage terms are the most popular among homebuyers, other options include 10-, 20- and 25-year terms. However, the longer the loan term, the lower the payment, which is important if you work within a limited budget.
According to data from Rocket Mortgage, a $200,000 loan at 6% interest would cost $1,687.71 per month on a 15-year term and $1,199.10 monthly on a 30-year term — almost $500 less per month for stretching out the mortgage.
Charissa Bright, owner and founder of Bright Buys Houses in Watkinsville, Georgia, has seen this strategy make a big difference for buyers.
“One big advantage of extending a mortgage term is that it lowers your monthly payments and makes homeownership feel way more manageable, especially if money is tight,” she said. “I’ve seen buyers get excited about a home but realize their mortgage payment was stretching their budget too thin. Spreading the loan over more years can ease that stress and free up cash for other expenses, like repairs or savings.”
Although extending your mortgage term might seem like a good idea to afford a home, Bright added that it doesn’t come without drawbacks.
Disadvantages of Extending Mortgage Terms
A longer loan term means paying more interest — sometimes a lot more — over time.
“I once ran the numbers for a buyer who extended their loan, and while their payment dropped, they were shocked to see how much extra they’d pay by the end,” Bright said. “If you go this route, make sure it’s a trade-off you’re comfortable with. Saving money now can cost you big later.”
According to Rocket Mortgage data, the total interest paid on a 15-year mortgage for a $200,000 home at 6% interest would be $103,788]. If mortgage terms were extended to 30 years for the same home at the same interest rate, the total interest would be $231,676 — or a whopping $127,888 more.
But more money isn’t the only drawback, according to Bill Lyons, founder, CEO and president of Griffin Funding. He pointed out that while it’s nice to have a lower monthly payment, homeowners not only need to be aware of increased interest costs over time but also slower home equity buildup and potential refinancing fees.
“It’s up to the homeowner to decide whether lowering the cost of monthly payments is worth the sacrifice in the long run,” he said.
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