got a endowment worth 11,000 pounds ,6 yrs left , forecast about 14,000
mortage for 33,000 with 9 yrs left
would i be better to cash endowment and pay off mortgage or keep to end.
taken advice but one says keep one says sell
endowment is from original house, just forgot about it, new house is repayment
ady1,
The problem with endowmnents is that most of the bonuses are paid terminally and not if you cash in early.
You really need to weigh up how much you will save on your mortgage interest by cashing in now and paying a lump sum off and also whether there are any penalities for paying lumps sums of your mortgage early.
You state it is worth £3000 less at the moment that it’s predicted final payout value, if indeed it reaches that value.
I don’t know what your mortgage interest rate is but at 5% you would save £3300 in interest payments over 6 years, which is £300 more in your pocket
Plus having paid off a lump sum, you could tell your mortgage company that you wish for your monthly re-payment to remain the same as it is at present, thereby making further overpayments every month which in turn would save you more interest long term.
Hope this helps.
Ian.
ady,
Sounds like Ian knows what he’s on about!
That Martin Lewis site (www.MoneySavingExpert.com) has a dedicated section on endownments and reveals some interesting info that could get you more money back than you may be expecting.
The following is a sample of text from that site;
There is massive compensation available if you were mis-sold a mortgage, yet there’s a deadline on complaints and it’s running out. This is a brief article on what to do to find out if compensation is due and how to get it without paying a penny, or giving anyone else a cut!
If interest rates go up you will gain. You need to decide whether you think they may go up or not. At the minute they are relatively low. I wouldn’t cash it in as you may loose out on terminal and reversionary bonuses. On the plus side its £14,000 cheap life cover with a lump sum in six years.
The deadline for compo for miss selling was 1st of April for a lot of companies no harm in checking it out though.
