Shorter mortgage term or smaller loan amount?

frattonite

Hi all, this is my predicament, I'm in a position to either pay an amount of cash off my mortgate amount or reduce my mortgage term. If I do the first option then I'll go below 25k which seems to set a new problem as when my current deal expires in October many lenders don't lend under 25k! (which is what I'll owe by then) but if I reduce the term then my monthly fee won't reduce, what do you guys recomend?

Welshlassie

It depends whether you need for monthly amount to reduce or not. If you don't then keep it as it is, pay off the lump sum you have (assuming the lender will actually allow this) and you see the term continue to come down, then in October see what the rates are at, you may find that the SVR you will go onto is fine to stay with, otherwise look for a mortgage above what you want, but with no penalty for overpaying, borrow more than you need and pay off the extra straight away.
HTH