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Best way to deal with final 18 months of mortgage?
rollon65
Posts: 155 Forumite
Hello all,
Having browsed this section a bit before registering, I imagine that the comparatively small sums of money involved will raise a gaffaw or two, but as a "veteran" of the 13%+ interest days, I assure you that relatively speaking I have been mauled just as badly in my time.
I owe Nationwide a shade over £14,000 on an endowment linked mortgage that is due to be settled by August 2010.
Back in February 2008, Standard Life indicated a shortfall of around £400 on the policy that was to settle £12,000 of it.
I have just had the maturity notice for that policy, which matures in March of this year and the shortfall turns out to be not £400 but more like £1,200!
I have the further £2,000 debt to Nationwide covered by another endowment policy which I expect to under-perform to an even greater degree and that is due to mature in October 2009.
I have a little over £5,000 in an ISA as a result of a redundancy payment but don't really want to touch that as it represents a "rainy day" contingency fund for my approaching retirement, but other than that have little alternative savings.
I propose to pay Nationwide the £10,800 from my main endowment policy, then to request the outstanding debt to be converted to a repayment mortgage, continuing the same level of repayment as I have been paying to cover the entire £14,000.
Come October 2009, I shall pay additionally whatever the secondary endowment policy produces, with the view to only touching my "rainy day" fund as a last resort before I retire in 2012.
In view of the poor and risky returns to be had, I see no merit in investing the £10,800 until August 2010 as it appears to me that the reduction in interest paid to Nationwide would be more beneficial to paying off my mortgage than any pittance I could hope to earn from investing it for the remaining period.
What I would really appreciate is to hear if any knowledgeable member can see any flaw in my thinking or if anyone can come up with a no-risk better alternative.
Many thanks, in anticipation, to anyone responding - rollon65.
Having browsed this section a bit before registering, I imagine that the comparatively small sums of money involved will raise a gaffaw or two, but as a "veteran" of the 13%+ interest days, I assure you that relatively speaking I have been mauled just as badly in my time.
I owe Nationwide a shade over £14,000 on an endowment linked mortgage that is due to be settled by August 2010.
Back in February 2008, Standard Life indicated a shortfall of around £400 on the policy that was to settle £12,000 of it.
I have just had the maturity notice for that policy, which matures in March of this year and the shortfall turns out to be not £400 but more like £1,200!
I have the further £2,000 debt to Nationwide covered by another endowment policy which I expect to under-perform to an even greater degree and that is due to mature in October 2009.
I have a little over £5,000 in an ISA as a result of a redundancy payment but don't really want to touch that as it represents a "rainy day" contingency fund for my approaching retirement, but other than that have little alternative savings.
I propose to pay Nationwide the £10,800 from my main endowment policy, then to request the outstanding debt to be converted to a repayment mortgage, continuing the same level of repayment as I have been paying to cover the entire £14,000.
Come October 2009, I shall pay additionally whatever the secondary endowment policy produces, with the view to only touching my "rainy day" fund as a last resort before I retire in 2012.
In view of the poor and risky returns to be had, I see no merit in investing the £10,800 until August 2010 as it appears to me that the reduction in interest paid to Nationwide would be more beneficial to paying off my mortgage than any pittance I could hope to earn from investing it for the remaining period.
What I would really appreciate is to hear if any knowledgeable member can see any flaw in my thinking or if anyone can come up with a no-risk better alternative.
Many thanks, in anticipation, to anyone responding - rollon65.
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