Mortgage lump sum payment options help please.

NTG_2

I have a part endowment and part repayment mortgage currently at 5.29% (0.29 above base for the life of the mortgage) The endowment is split into two policies, one of which has just matured at £3600, the other £37900 policy matures in 2012.
The repayment mortgage finishes in 2016, a little early as I pay £100 extra each month.

There is £95000 outstanding debt, £41500 endowment and £54000 repayment. My question is; is it better to use the £3600 to pay off some of the repayment part or use it to reduce the interest only part?

I have an ISA running along side the outstanding endowment to cover the shortfall, so this can be increased to cover the £3600 endowment if I decide to use this to pay off some of the repayment part.

Any advice from you experts out there would be appreciated.

sheslookinhot

I am no expert, but I would take it off the interest only part. Your repayment amount is always decreasing, the interest-only will never change, unless you make overpayments to reduce it.

add the endowment premium cost plus the reduction in mortgage (due to reducing I/O part) back onto to your reypayment amount to make further inroads.

dimbo61

Make sure you are getting the best return from your ISA,s and fill a cash ISA each ( partner ? ) might be better as mortgage rate 5.29% and best buy ISA,s paying 6/6.5% tax free.
Use ISA,s to pay off lump sum off mortgage only if rate less than mortgage rate.
save into ISA,s and overpay on both parts if allowed and you can afford and
keep a very close eye on endowment. GOOD LUCK