Merge with motion vector difference (MMVD) is a simple yet efficient coding tool adopted in VVC. However, the efficiency of MMVD drops a lot in the reference software beyond VVC, known as ECM, this paper proposes a template matching (TM) based extension for MMVD (TME-MMVD) for inter prediction. Firstly, extra refinement positions are introduced along diagonal angles. Secondly, based on a template matching cost calculated as a distortion between samples of a template and their reference samples, the refinement positions are reordered. Finally, the preferable ones with the lowest costs are selected as available positions and consequently for index coding. This method is also extended to the affine MMVD mode. The proposed method is implemented on top of the ECM2. Experimental results show that the proposed method provides 0.69% and 0.64% bitrate saving compared to latest VVC SW and 0.24% and 0.31% bitrate saving compared to ECM2 under the JVET common test conditions for random access and low delay configurations, respectively.