check my maths!

wymondham

Hi All
We have a mortgage with Abbey at present which we end our tie-in period in April next year. We have 10 years remaining and it's split into part IO and part repayment (£35k IO, 18k repayment). We recently got a payout on the endowment for mis-selling so wondering now to ditch it when we get a new deal next year...

We've been told we'll get 14k if we cash in the endowment and I was wondering to pay off part of the IO mortgage and reduce our total debt to 39k on a new repayment term over 10 years - to my reckoning we could reduce our outgoing by £100 per month as not paying £151 p/m on the endowment anymore... does anyone see a flaw in this plan?? your comments would be most appreciated!!! (ps we have a seperate life policy so not worried about not having the endowment cover..)

wymondham

** bump **

Robert_Sterling

There is not much arithmetic to check.
You owed £53,000. You might pay off £14,000 which as you say leaves £39,000. Q.E.D.

homer_j_3

reducing debt as fast as you can will always get a thumbs up

fez_2

Your monthly outgoings would reduce by around £73 not £100 (based on typical 5% mortgage rate) and of course your mortgage would be guaranteed to be paid off after 10 years.

If you do the above but maintain your payments at current levels, i.e., increase new mortgage payment to match current combined mortage and endowment payment, you could reduce your term by nearly two years which in turn would save you nearly £2k in interest.