Reducing monthly payments or reducing term of loan

D

Deisce

Registered User
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114
Hi,
looking for advice here on what to do with paying a lump sum off my mortgage. They have given the choice of reducing the term or reducing payments. The term will be reduced from 35 years to 24 years or the payments will drop from 1450 to 1108 euro per month. Which is better from a point of view of trading up in a few years.

Cheers
 
With regards to trading up in a few years- Hard to say in current environment.
In normal times reducing the term would be the thing to do.

If you can afford to pay what you are paying now then I would reduce the term. If you are finding the payments of 1450 per month hard then I would reduce the payment.
or do a combination.

If your lump some is substantial then you could split it between paying off some of the mortgage and investing the rest.

Do you have any Credit card debt or personal loans. I would pay off the higher rate debt first before I tackled a lower rate mortage debt.
 
I have no credit card debt or loans. I got burnt by leaving my SSIA in equitys so I don't fancy investing is anything with risk. I will reduce term.

Cheers

Deisce
 
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