Help, Endowment & Mortgage advice

tomo_2-2

Hi,
This is my first post but am in need of advice, which I will take just like listening to a guy down the pub.
Situation:-
I have a Phoenix RSA Endowment (i know they are useless) which matures at average 33500.00 (no pound sign on laptop) in 2022 and have a mortgage for 45000.00. I have been paying this for 10 years and the surrender value as of March 2006 for the endowment from Phoenix is 6650.00.
Now, should I cash the Endowmnet(contacted AAP and they do not want it) and put the whole mortage on repayment at fixed rate or keep the endowment and pay the shortfall on repayment assuming the endowmnet stays on course as above.
The other thing is I want to borrow a extra 10,000 for home improvements and need to keep it as little as possible as only one income at the moment and try not to increase the years to repay.
Sorry bit of a long winded question

EdInvestor

I would suggest you surrender the endowment and remortgage.It's highly unlikely you will get any more than the guaranteed value for the endowment ( which is how much, BTW?) and they may try to chip away at that If you throw the surrender value at the mortgage, the return should be significantly better.

tomo_2-2

the guaranteed value for the endowment is around 20,000.00 and excuse me for being stupid but what is BTW

dreamylittledream

btw = by the way

As for the policy - there are no guarantees on the policy as you are well aware - so are you happy to continue using something risk based to back your mortgage?

Or put it another way are you prepared to pay any shortfall yourself out of your own pocket at the end of the term?

If you aren't then repayment may be a better option...

All you have to decide then is if you are happy investing money into a policy that may continue to do very badly or whether you'd be better off putting the money under the bed etc

dunstonh

Old RSA policies in the with profits funds (not the unit linked) have very very low potential for growth. This is why there is no third party market for them.

Unless there is a contract reason to stay (perhaps life or CI cover needed which cannot be obtained elsewhere or a rare guarantee on the growth rate of the plan), then it is worth considering your alternative options.

tomo_2-2

Thanks for your advice, I think I will cash in the Endowmnet and go for a repayment