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Endowment mortgage advice sought
Angilion
Posts: 42 Forumite
I have a mortgage of £26000 and a secured loan of £7600 bundled into it, all fixed at 5.09% until 2016 and finishing in June 2022.
The mortgage is an endowment one. The total cost is £222 a month - £177 for the loan and the interest on the mortgage and £45 for the endowment.
The endowment was with Royal Insurance, which became Royal and Sun Alliance, which passed it (and all the others) to Phoenix.
It is, unsurprisingly, doing very badly. I've been sticking my head in the sand for too long.
Sum assured is £10851.
Bonuses so far are £1181.
Projections are £16300, £18000, £19900 with 4, 5 and 6%
Given the size of the projected shortfall, I'm inclined to think that I would lose less by dumping the endowment and switching to repayment.
My mortgage is with Northern Rock. I've contacted them and I can switch to repayment at a cost of only a £75 admin fee. My repayment would then be £290 (for mortgage and secured loan).
The surrender value of my endowment is £5233. So I would have been much better off leaving the money in a carrier bag in the wardrobe (I've paid in about £6400), but that's a done deal.
I can overpay anything I please on my mortgage at any time as long as I don't completely pay it off, so I would use whatever money I recover from the endowment to make an overpayment. £5000 overpayment would reduce my monthly payment to £249, or just £27 more than I pay now.
So it seems to me as though my best course of action is to surrender the endowment, switch to repayment and overpay on the mortgage, or sell the endowment if I can.
But I could be missing something important due to lack of knowledge, so I'd welcome some advice. My track record in this area isn't good - I mean, I bought an endowment mortgage
If selling my endowment is a good idea, does anyone have any advce on where? A quick search shows hundreds of companies - how can I compare them? I can't afford to take a chance on a company picked at random. The amounts involved no doubt seem very small, but so are my wages (£13K a year).
Thanks for any time anyone spends on this.
The mortgage is an endowment one. The total cost is £222 a month - £177 for the loan and the interest on the mortgage and £45 for the endowment.
The endowment was with Royal Insurance, which became Royal and Sun Alliance, which passed it (and all the others) to Phoenix.
It is, unsurprisingly, doing very badly. I've been sticking my head in the sand for too long.
Sum assured is £10851.
Bonuses so far are £1181.
Projections are £16300, £18000, £19900 with 4, 5 and 6%
Given the size of the projected shortfall, I'm inclined to think that I would lose less by dumping the endowment and switching to repayment.
My mortgage is with Northern Rock. I've contacted them and I can switch to repayment at a cost of only a £75 admin fee. My repayment would then be £290 (for mortgage and secured loan).
The surrender value of my endowment is £5233. So I would have been much better off leaving the money in a carrier bag in the wardrobe (I've paid in about £6400), but that's a done deal.
I can overpay anything I please on my mortgage at any time as long as I don't completely pay it off, so I would use whatever money I recover from the endowment to make an overpayment. £5000 overpayment would reduce my monthly payment to £249, or just £27 more than I pay now.
So it seems to me as though my best course of action is to surrender the endowment, switch to repayment and overpay on the mortgage, or sell the endowment if I can.
But I could be missing something important due to lack of knowledge, so I'd welcome some advice. My track record in this area isn't good - I mean, I bought an endowment mortgage
If selling my endowment is a good idea, does anyone have any advce on where? A quick search shows hundreds of companies - how can I compare them? I can't afford to take a chance on a company picked at random. The amounts involved no doubt seem very small, but so are my wages (£13K a year).
Thanks for any time anyone spends on this.
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