When you extend your mortgage term, the amount you pay each month will go down. However, it’s important to remember that you will pay more in interest charges as it will take you longer to repay the mortgage.
If you are looking to reduce the total amount of interest payable and the overall cost of borrowing over the term of your mortgage, you should consider the option to make an overpayment rather than a term extension.
The two examples below show how a term extension could help to reduce your monthly payment closer to what it was before a payment holiday. They also show the impact a term extension has on the total amount you’ll repay on your mortgage: