Should I use a lump sum to pay down my mortgage?

Posted on 11 August 2008

I am an existing mortgage holder on a property currently valued at £210,000. The mortgage is currently interest-only and has 19 years to run. I would like to revert to repayment whilst reducing the monthly payments. I have a £60,000 lump sum available I can reduce the mortgage by. What are my basic options for re-mortgage?

Thanks for your question. Your options are wide open. Converting to a capital repayment mortgage is a great idea as it guarantees that mortgage is repaid at the end of the term, providing you have made all monthly payments on time.

Reducing your balance will help bring payments down. You could also look at extending the term, depending on your age and expected retirement. By extending the term your monthly payments will be reduced however you will pay more interest in the longer term.

The best advice I can give is to seek advice from a mortgage broker who will be able to take your details and complete the research for you. You can contact one of our Charcol brokers on 0845 413 1067.

I wish you all the best.

 

Answers provided in response to Ask Bea are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not neccessarily represent the views, positions, strategies or opinions of Charcol Limited. All comments are made in good faith, and neither Charcol Limited nor Bea will accept liability for them.

We recommend you seek professional advice with regard to any of these topics where appropriate.

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