Endowment cash-in or keep mortgage - advice please.

Ahem

Hi, I would appreciate it if someone could confirm that Im doing the right thing by cashing in my 2 endowment policies to pay off my mortgage.

My Abbey loan is interest only at £25500 on variable rate with no repayment penalty and 4 years left to run.
I have 2 endowments, £60 (Sun Life of Canada, not with profits) & £16 (Standard Life, with profit), and at full term (in 4 years) the payout should cover the Abbey loan and MAY give a surplus extra £9500 (at 5.5% predicted growth).
So, if I do nothing for the remainder of the term the total cost of my mortage plus endowment payments will cost me nearly £10600 at current interest rates, and I stand to possibly make £9500 surplus from the endowments, a net loss of £1100.
But a current valuation the combined surrender value of the 2 endowments will allow me to pay off the mortage now, almost to the pound, so I would save the £10600 ie 4 years worth of endowment premiums and mortgage interest payments.
So it seems doing nothing will cost £1100, but paying off the loan and cashing in my EPs will save me £10600.
Is this too easy? Any reassurance welcome before I take the plunge.

Thanks in advance. Andy

I appreciate that losing the EPs will also mean loss of life insurance cover, and the possibility that selling the EPs may raise higher than surrender values.

EdInvestor

Ahem wrote: »

But a current valuation the combined surrender value of the 2 endowments will allow me to pay off the mortage now, almost to the pound, so I would save the £10600 ie 4 years worth of endowment premiums and mortgage interest payments.

Sounds good to me in the current financial climate

Ahem

EdInvestor, thankyou.

linni

I cant say whether it was the best thing to do or not, but I cashed in all our policies, because none of them were likely to get anything near what they were supposed to. I felt so good when I did it. It paid most of the mortgage off. I still pay the same monthly amount off the mortgage every month and it wont be long before it is all paid off... For me it was worth it not to have the worry of it all.

Good luck in whatever you decide to do.

Ahem

Thanks. I will try to get a selling valuation for the SL policy first, but if unsuccessful will just surrender them. Must admit, the relief of losing the millstone is starting to build - I cant remember the last time I was this excited.:j

linni

It is a great feeling, and also addictive. I find myself paying off the odd few quid every now and then and can't believe how quick it is going down, and how much interest I have saved, now that the large part of it has gone. If anything really bad happens I know I could probably sell the car and pay it all off... I am sooo pleased with myself!!

Do let us all know what you decide to do..