to surrender or not...

skier1066

I have a 20yr old endowment which mature in 5 yrs time. Their vaule is £33k and £17k respectively.

I have approximately £25k left on my endowment mortgage. There are no penalties for over paying the mortgage and do this each month.

I have been told the approx surrender value of these endowments is

£13,533 (for the £33k one)
£8,893 (for the £17k one)

so roughly £22k of value. These are both with Std Life, and there is no surrender penalties.

Is it just as siomple as surrending the endowments and putting it toward the mortgage. This will leave about £3k left which I can pay off with my savings, and still leave enough for a rainy day.

I know I have to think about life insurance but have I missed anything else. Mortgage is with HSBC

Can it be this simple

Thanks for any help

Skier1066

EdInvestor

What interest rate are you paying on the mortgage?

Are the endowments unit linked/unitised With Profits or conventional With profits?

skier1066

Hi,

Its a conventional with profits.

I believe its 1.49% at the moment, ie 0.99% above base rate.

Thanks Skier1066

EdInvestor

You could do as you suggest but because you are paying such a low mortgage rate, it's likely you would lose out.

You would be better to wait until mortgage rates rise to around the 3-4% level, and then review the position, especially as your policies have guaranteed values..

G_M

You could also consider selling your policy. There are companies which buy these, usually for more than the surrender value, and make their money by holding them till they mature. Be careful to ensure you fully understand any quotes/contracts you receive, but this is an accepted way to increase their value to you.

Read the FSA explanation here.

Here is an example company, but just google 'sell endowment' for many more.

skier1066

Only one policy (the £33k one) has a guaranted miminimum payout, which i believe is around £16.5k

The other is not guaranted.

The terminal bonus is around £2k I believe

The guaranted increase does not seem to warrant the total extra payments of around £6k to pay the remainder of the 5 yr term

Thoughts appreciated.

Skier1066

EdInvestor

Post more details of the policies

guaranteed sum assured
declared bonuses
surrender values
monthly premium
maturity date
maturity forecasts

Nosht

skier1066 wrote: »

I have a 20yr old endowment which mature in 5 yrs time. Their vaule is £33k and £17k respectively.

I have approximately £25k left on my endowment mortgage. There are no penalties for over paying the mortgage and do this each month.

I have been told the approx surrender value of these endowments is

£13,533 (for the £33k one)
£8,893 (for the £17k one)

so roughly £22k of value. These are both with Std Life, and there is no surrender penalties.

Is it just as siomple as surrending the endowments and putting it toward the mortgage. This will leave about £3k left which I can pay off with my savings, and still leave enough for a rainy day.

I know I have to think about life insurance but have I missed anything else. Mortgage is with HSBC

Can it be this simple

Thanks for any help

Skier1066

A lot can happen in 5 years, it's always a gamble but increasing bonus payments are long overdue.


Regards,


N.