Longer loan terms growing in popularity

According to data from Loan Market, the most popular loan term is now 30 years.

Loan Market spokesperson Paul Smith said 30-year loan terms are popular with borrowers who are looking for significant flexibility.

However, he went on to add that 30-year home loans also come with a few pitfalls.

“On a 30-year loan term for a $300,000 mortgage, your repayments are going to be about $40 a month less than a 25-year term, but you’re going to pay about $75,000 more in interest by taking five more years to pay off your home loan,” he said.