mortgage lump sum payment

webbo1

I recently made a lump sum payment on my mortgage. When making the payment, I was asked whether I would like the payment to affect the term of my mortgage, the amount owed or neither,meaning that I could take a payment holiday if required. I chose the latter,but am still unsure which option would have been best for me??? Any advice please

Thrugelmir

You took a payment holiday?

kingstreet

Did you want to pay the mortgage off more quickly?

Did you want to reduce the future monthly payments?

Did you want to not pay your mortgage for a while?

The option you should have selected would have been based on a positive answer to one of the above questions.

rb10

If you'd chosen for it to come off the term, your ongoing repayments would remain the same, but your mortgage would be fully repaid earlier than is currently planned.

If you chose for it to reduce your monthly repayments, then they'll recalculate the amount you need to pay each month - it would reduce slightly.

As you've taken a payment holiday, you won't need to make payments for the next X months.

Which is best entirely depends on your situation.

Reduce the term will ensure you pay the minimum amount of interest. Reduce monthly payments can help if you are likely to struggle to meet the contractual repayments in future months. A payment holiday is useful if you've lost your job or have a short term difficulty.