Refinance / Restructuring
Can You Extend Loan Terms When Refinancing?
5 min read- Finance Guide
- Updated 2026
Quick answer
Loan terms can often be extended to
25 30 years
for many standard home loan structures
- Main checks Policy + serviceability
- Repayment effect Lower monthly repayments
- Main trade off Higher total interest over time
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Key concepts in extending loan terms
Loan to value ratio
LVR still matters because the new lender assesses the loan as a fresh application, even if the purpose is mainly to reduce repayment pressure
Property valuation
A current valuation may affect whether the refinance proceeds and how much flexibility exists in the new structure
Serviceability
A longer term can lower the monthly repayment, but the borrower still needs to pass the lender's servicing assessment
Total interest cost
A longer term can improve cash flow now, but it usually increases total interest unless extra repayments are made later
How loan term changes work
When refinancing, borrowers can sometimes extend the remaining term, reset to a new full term, or choose a structure that balances repayment relief against long term cost.
Resetting the term
New 25 to 30 year term
A refinance may reset the amortisation period, which can lower the required repayment compared with keeping the old end date
Keeping the same lender
Variation or restructure
Some borrowers may not need a full refinance if the current lender can approve a term change or hardship related restructure
Main trade off
Lower repayments, more interest
Extending the loan term can improve short term affordability, but usually increases the total interest paid unless repayments rise again later
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What lenders assess
When deciding whether a loan term can be extended, lenders usually review:
-
01. Current income, expenses and liabilitiesServiceability
-
02. Repayment history and reason for the term extensionConduct and purpose
-
03. Borrower age, remaining term and lender policy capPolicy fit
Common problems when extending loan terms
LVR is too high
If the valuation comes in lower than expected, the borrower may not have enough equity to complete the refinance on the new term requested.
Possible solutions include:
Reduce the requested loan amount- Contribute additional equity if available
- Consider whether the current lender can vary the term without a full refinance
The repayment improves but the total cost rises
A longer term may help with cash flow, but the lifetime interest bill can increase substantially if the borrower only makes the new minimum repayment.
Possible solutions include:
- Run the numbers over the full loan life
- Plan extra repayments later if cash flow improves
- Compare the lower repayment against the added long term interest
Age or policy limits
Some lenders limit maximum expiry age or maximum loan term, which can restrict how far the term can be extended even when repayments are otherwise manageable.
Possible solutions include:
- Check lenders with different age policies
- Consider a shorter extension rather than a full reset
- Review whether a hardship variation with the existing lender is more realistic
Steps to extend a loan term when refinancing
Step
01
Review the current loan balance, rate, remaining term and repayment
Step
02
Check whether a longer term refinance would actually improve cash flow enough to justify switching
Step
03
Gather income, expense, liability and property documents
Step
04
Compare lenders that allow suitable term lengths and structures
Step
05
Submit the refinance application and complete valuation and credit assessment
Step
06
Complete approval, settlement and then review whether extra repayments should be made later
Speak with a Property Finance Specialist
Refinance outcomes can vary significantly depending on equity, income, repayment history, age, rate type and the lender's loan term policy.
A specialist can review whether extending the loan term through refinance is realistic, what the repayment change may look like, and whether the long term cost makes sense.
Speak with a finance specialist about extending your loan term.
Submit the short form below and a finance specialist can review your current loan, repayment pressure and refinance options.
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