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if i make a lumpsum payment on my mrtg, is it worth reducing the number of years or reduce the monthly repayment amount?

toyraman
by toyraman 03 March 2011  |  Comments 3 comments  |  Love Love  0 loves

i have a mrtg of 156k for the next 21 years, now i have a lumpsum of £5000.

My bank says this payment could reduce the monthly premium by £30 or i could reduce the term, which would be a wise decision.

Thanks

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Comments (3)

  • MikeGG1
    Love rating 879
    MikeGG1 posted

    Interest rates are expected to rise soon and could go up several times before long. Keep paying the same amount and reduce the term. Then when the rates do increase, you won't have such a jump. You should also be able to lengthen the term back to your current term if the hikes are more than you can afford.

    Mike

    Posted on 03 March 2011 | Love Love  0 loves Report
  • killick_becki
    Love rating 58
    killick_becki posted

    Don't forget to clarify with your mortgage provider if they will charge you for making a lump sum payment, quite alot of fixed rate or trackers do.

    I agree with MikeGG1 and would reduce the term. You can always increase it later or take a payment holiday if needed.

    Posted on 07 March 2011 | Love Love  0 loves Report
  • toyraman
    Love rating 0
    toyraman posted

    Thank you very much

    Posted on 07 March 2011 | Love Love  0 loves Report

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