Mortgage lump sum pay in - reduce term or reduced payments?

Go for the term. This will reduce the interest that you have to pay in the long run.

Hi, There are a few of ways of doing this effectively pay off the lump sum which should have the automatic benefit of reducing your payments.

or change your mortgage to an offset were you can put the money in an linked savings account the interest you earn which is tax free can be used to reduce your monthly payments and your lump sum will be kept safe and you can pay off the lump sum at a later date so in effect you can do both with the benefit of earning more interest as its tax free.

Or you can use your tax free interest to reduce your term (pay more off your mortgage) that way you wont need all your lump sum to pay off the mortgage in a few years time.

Bank alway is the winner.i suggest that you should reduce you term.But you wont save too more.You would realize that when you pay the lump sum's money, the item in Bank statement will write "payment on interest and principal", actually bank just reduce your interest no your principal, so maybe you will feel that you repayment amount is decease, but actually is not.if you loan is house loan,you can reduce the loan amount through application with bank,but you need to find a agent.

reduced term is the way to go.if you can afford the same repayments now carry on with that method.that way will give you the option of reduced payments in the future if you get short of cash....

the faster you pay back the money, the less mortgage interest you will pay to the lender.