Moggy, if your mortgage payments are troublesome by all means apply your lump sum and negotiate a lower payment or shorter term.
The nature of your original question suggest that you are divorcing the value of your house from the outstanding mortgage balance. The loan is the loan, and you are responsible for it. The bank may not have any more than the value of your house as security but that does not mean they'll absolve you from paying the difference if it ever came down to it.
If you feel your mortgage payment is too high, follow your gut instincts and pay it off or pay it down if you have the chance.
The nature of your original question suggest that you are divorcing the value of your house from the outstanding mortgage balance. The loan is the loan, and you are responsible for it. The bank may not have any more than the value of your house as security but that does not mean they'll absolve you from paying the difference if it ever came down to it.
If you feel your mortgage payment is too high, follow your gut instincts and pay it off or pay it down if you have the chance.