Should I cash in this endowment with just 3 years left to run?

gillbill

dimbo61 wrote: »

No dont get hit with any penalties
Cash in the endowment and pay into the best instant access account which is kaupthing edge 6.55% before TAX ( does the wife pay tax ? )
Over pay on the mortgage by the £499 a month and wait till march 31 2009 to clear your mortgage.
If you can pay any money into cash ISA,s do so ( look for 6/6.25% tax free )

Thanks - we have submitted the endowment surrender form today - they take the value for surrender on the day that they receive the form - so lets hope tomorrow isn't a really 'black' day after all the goings on with the market because of bank bankruptsy in the USA today!! Both of us pay tax, so no tax free savings applicable, apart from what we can put into our ISAs.

Dick_here

EdInvestor wrote: »

If you cashed it in now and used the lump sum to reduce the mortgage, also increasing the mortgage payment by the amount of the endowment premium, at maturity your return would be 26,613, better than the provider's mid rate projection.

I don't doubt your figures at all Ed, but could you please explain how you get to the £26,613.

Dick_here

Ed, any answer ?

EdInvestor

It's a simple compound interest calculation.

Dick_here

Please show it explicitly, for us simple people then.