paying off mortgage with lump sum

[beckett]

Hello,

I want to reduce my mortgage payments by paying off a lump sum.
I read an article the other day that said I should pay off the Capital amount , what ever that is. I have 15 years left on my term.
What is the difference between paying off the capital amount and lodging a lump sum in the mortgage account ? Is there a difference ?
I'd appreciate if someone would clarify the best method .

thanks.

 

[c00lcarl]

to the best of my knowledge the capital amount is the amount you owe on the property without interest

 

[truthseeker]

Hello,

What is the difference between paying off the capital amount and lodging a lump sum in the mortgage account ? Is there a difference ?

The difference is that if you pay off the capital amount (plus any interest and penalties for paying off early) - then thats it, you have paid off your mortgage.

Lodging a lump sum in the mortgage account (I assume you mean the account that the money is taken out of each month) just means that there are funds there to make the monthly repayments.

Why dont you ring your bank and ask them how much it would cost you to pay it off and if you have enough in funds tell them you want to do it.

 

[PaddyW]

Paying directly off the capital will reduce the term of your loan, just putting it in towards interest will lower your payments, but term will stay same