It is important to be aware of the mortgage refinancing trap without due consideration to the term of the new loan. Refinancing results in lower monthly repayments seem very attractive, but the revised loan term may mean paying more in total interest over the life of the loan. For example, Customers who have had a 25 year mortgage for a lengthy period (say 5 or more years) may potentially fall into this trap by taking a new loan over a 25 year period at lower monthly repayments, however, are not in a better overall financial position. The term of the new loan is a critical decision to determine the customers financial breakeven point and therefore, justify refinancing.

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