EdInvestor...got the figures you need

Torby

Eventually got the figures for the endowment we took out to cover our £22500 mortgage

Post some info about the endowment.

Guaranteed sum assured £8618
Declared bonuses £11210
Surrender value £23271
Monthly premium £31
Maturity date 09/03/2009
Maturity forecasts £24169
Monthly Mortgage Payment £105

EdInvestor, would we be right in thinking if we surrender now we get £23271 plus 5 or six months saved on mortgage/premiums yet to be paid approx £23951 in total....

and if we let it run it might mature at £24169...yet we would have to pay those 5 months of payments which means in real terms £23489 is how we'd end up?

The way the financial world is at the moment would we be better cutting and running now?

The advisor at CM said terminal bonuses are reviewed every 6 months (aug and feb)...so with our luck and the state of the industry, it could take a BIG drop the month before we're due to mature....making the matured figure a lot less than the forecast.

With figures apparantly changing on a daily basis...goin down....its a difficult choice....or is it?

EdInvestor

Torby wrote: »

Maturity forecasts £24169
Monthly Mortgage Payment £105

Assuming your mortgage interest rate is 5.6%, if you cashed in the policy now and used both the lump sum and the premiums to reduce the mortgage, your return at maturity would be 24,114 with no risk.

You don't say what growth rate is assumed for the maturity forecast of 24,169.

However in the next months it is more likely because of the state of the markets that the endowment will fall in value than rise.

The advisor at CM said terminal bonuses are reviewed every 6 months (aug and feb)...so with our luck and the state of the industry, it could take a BIG drop the month before we're due to mature....making the matured figure a lot less than the forecast.

Indeed so.

If you want certainty - and the risk free outcome is almost the same as the forecast value - then go now.

KieranB

I believe that unless the endowment is invested just in cash, if the markets carried on the way they are the value may fall over the next 6 months..

I would surrender it personally..