Extending the term of your mortgage
Can you lower your monthly mortgage payments by extending the term?
Yes, extending your mortgage term can lower your monthly repayments, but it increases the total interest you pay over time. You’ll need your lender’s approval and some lenders may charge an administration fee. While extending the term won’t damage your credit rating, missing payments without agreement can.
It can be a useful option if you’re under financial pressure, but it’s important to compare the long‑term cost using the CCPC Mortgage calculator to find out how different terms affect your repayments and total interest. If you’re unsure, get free, independent advice from the Money Advice and Budgeting Service (MABS) before making changes.
Why consider extending your mortgage term?
If you’re having difficulty making repayments, extending the term can lower your monthly outgoings and help with cash flow. Contact your lender directly. They will explain the process and what information you need to provide.
Will extending your mortgage affect your credit rating?
Extending the term will not affect your credit rating negatively. However, missed payments without agreement can harm your credit history, so contact your lender as soon as you feel like meeting your monthly payments is becoming a struggle.
What fees apply?
Some lenders may charge an administration fee for changing your mortgage term. Check with your lender before applying.
How does extending the term affect your repayments and total cost?
A longer term means lower monthly repayments, but you’ll pay more interest overall. For example, extending a €200,000 mortgage at 4% APRC from 20 to 25 years reduces monthly payments by about €150, but adds €25,000 in extra interest.
How can you compare options before deciding?
Use the CCPC Mortgage calculator to learn how different terms affect your repayments and total interest.
Can you reduce the term again in the future?
If your financial position improves, you may be able to shorten the term again, reducing the overall interest paid.
What documents or proof do lenders require?
You may need to provide details of:
- Your income
- Expenses and overall financial situation
- Some lenders ask for recent payslips or bank statements
Can you extend your mortgage term if you’re already in arrears?
This depends on your lender:
- Some may allow it as part of an arrears arrangement
- Others may require you to clear arrears first
Can you make overpayments after extending the term?
Yes, most lenders allow you to make overpayments after extending your mortgage term. Overpaying can help reduce the overall interest you pay and may shorten your mortgage term again. If you’re on a variable rate, overpayments are usually allowed without penalty, but always check your lender’s terms.
If you’re on a fixed rate, some lenders may limit the amount you can overpay each year or may charge an early repayment fee for overpayments above a certain threshold. Always check with your lender before making overpayments to understand any restrictions or fees that may apply.
Check out our Over payments calculator to possibly save on interest and shorten your term.
Is there a limit on how many times you can extend your mortgage term?
Policies vary by lender:
- Some allow occasional changes
- Others limit extensions to exceptional circumstances
- Lenders may look at your age and the date you retire as a cut-off for extension
Does extending the term affect mortgage protection or insurance?
It can. You may need to update your mortgage protection policy to match the new term.
Is extending the term the same as refinancing or restructuring?
- No, extending the term means keeping the same mortgage but lengthening the repayment period.
- Refinancing usually involves switching to a new mortgage and restructuring may include other changes like interest rate adjustments.
What alternatives are available if you can’t afford repayments?
Options include switching to interest-only for a period or restructuring your mortgage.
