Endowment help please

cal1_2

Hi Everyone
I have an endowment policy I don't know whether to keep or not. It was initially taken out in 1 May 1993 with the hope of paying £30,000 mortgage on maturity. I now have part repayment part endowment, and still need it to cover £30,000. It was originally a britannia life endowment, now with Pheonix.

On my paper work it says:-

Annual Policy Statement
Your Traditional With Profits policy update.....

Maturity date 1.5.2018
Guaranteed sum assured 12,269.00
Plus previous bonuses of 2418.57
Total policy benefits 14687.57

I pay £45.36 per month. (i've paid in £8754)

The surrender value is 8279.78

Assuming your investments grow at

3.25%= projected final amount £16,800, projected shortfall £13,600
4.25% = " " £18,100, " " £12,300
5.25% = " " £19,600, " " £10,800


I am in the process of applying for a further fixed rate product (My mortgage at present stands at 40K repayment & 30K interst only). I have asked for to remortgage at £50k repayment and 20K interest only and because I have got a better rate than what I am on at the moment, I am paying about £10 pounds less per month and i've cleared £10k off the endowment if you see what I mean. This application is not set in stone, I have to confirm my intentions by the end of the week. Can anyone offer any advice please?
Gratefully yours
c x

cal1_2

Is the :D:D knowledgable Ed Investor around? Can anyone help at all? Pretty please?
x

EdInvestor

What interest rate are you paying on your mortgage?

cal1_2

Thanks EdInvestor:D, I was hoping you'd be around:D
I am presently paying 5.49%, this 10 year deal finishes at the end of the month. I have signed up for a 10 year fix at 4.69 though the sub accounts can still be altered. I presently have £40k on repayment and £30K on interest only.

At the end of the month on the new deal (I can change this, this week) I will have £50k on repayment and £20K on interest only, paying 4.69%. I am paying approximately £10 per month less on this new deal. Also, the endowment will now need to make £20k as opposed to £30k originally if I do it this way

Any ideas? Your help is very grateful received. I will check back later, i've got to take the kids somewhere now;).
Thanks very much

cal1_2

I've just put facts and figures into the egg mortgage calculator. If I surrender my endowment and pay (with a bit from me) £9k off the total mortgage amount so it becomes a £61k mortgage (after my present deal finishes and before my new one starts;)) I will pay £472 per month.

If I keep the endowment running and do the £50/20K split I will pay £465 per month plus the £45.36 endowment.

Have I just answered my own question?:o

At least surrendering the endowment guarantees that all the mortgage is paid off in 15 years time (obviously presuming I keep up with payments etc etc, blad di blah.....)
Regards,
cx

EdInvestor

cal1 wrote: »

Assuming your investments grow at

3.25%= projected final amount £16,800, projected shortfall £13,600
4.25% = " " £18,100, " " £12,300
5.25% = " " £19,600, " " £10,800

If you dumnped this policy and used the lump sum surrender value to reduce the amount owed now, also upping the monthly mortgage payment by the amount of the endowment premium, your return at maturity would be £18,535 and that's guaranteed.

This is a zombie endowment which will struggle to make even the low forecast, so I should bin it asap.Replace the life cover first if you need it.

cal1_2

Hi
Thank you very much for your reply - much appreciated. You confirmed what I thought really. I will enquire about surrendering it.

Thank you again for all your help:D You are a star!!!!!!!!!!:D:D:D