Struggling homeowners are increasingly hitting the pricey reset button on their loans in the hope of dragging down their monthly repayments.
It’s adding years to the length of their loans and potentially hundreds of thousands of dollars in interest costs.
A recent Finder.com.au survey revealed one in eight mortgage holders polled revealed they had extended their home loan to lower their repayments over the last year.
In a trend described as “borrowers stuck in mortgage quicksand”, about half of those who had extended their loans had added more than five years to the life of the debt.
This would result in much higher interest costs over the lifetime of the loan, despite cheaper monthly repayment bills in the short-term, Finder revealed.
“Even a small increase in the length of a loan term can add up to big differences in interest over the life of a home loan.”
http://www.martinnorth.com/
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