Do I cash in my endowment?

mummyofonechild

Hello this is my first post

I have £21000 left to pay on my mortgage which ends in August 2017. The payments are £200 a month plus £100 extra as an overpayment. I have an endowment which was valued last week at £11000 and ends in Jan 2018 for which I am paying £43.32 a month. Am I correct in thinking if i cash in the endowment and pay it towards my mortgage I will be left with a balance of £10000. If i still pay my original mortgage payment of £200 per month along with £43.32 which was my premium and carry on overpaying £100 a month. I can be mortgage free in the summer of 2012. We could be saving £15000 in mortgage/endowment payments. Am i missing something or is it that easy?

Des_Res

I'm not an expert, but i think it is that easy yes. You may be also be able to get more than the cash in value of 11000 if you sell it on, maybe 5-10% more. a financial adviser may be able to tell you more.

hope this helps ;-)

mummyofonechild

Thank You. I just wondered if i was missing something obvious.

Des_Res

oh yes, if you're relying on the endowment for life insurance you may need to take out extra cover, but it should be very cheap to cover only 10k outstanding amount.

Dick_here

mummyofonechild wrote: »

Thank You. I just wondered if i was missing something obvious.

One thing at least. The endowment provides life assurance, if you cash it in you lose that, which is a problem if you die prior to paying off the mortgage, i.e. you need to factor in the cost of replacing it.

mummyofonechild

Good Point, hadn't thought of that, as you say wont be too expensive.

EdInvestor

This may or may not be a goood idea.Post some more info so we can see.

Endowment provider's name
Guaranteed sum assured
Declared bonuses
Surrender value
Maturity date
Maturity fortecasts
Interest rate on mortgage

mummyofonechild

1) Standard Life
2) £35000 if you mean target amount arranged to pay off at beginning
3)£1300
4)£9840 + £1300 final bonus
5)Jan 2018
6)4.24%

Angela

Sometime you can only pay so much back a year I think mine is 10% of total amount. HTH
Check your paperwork

mummyofonechild

I can overpay any amount I like as our fixed rate ended a few years ago, so that shouldnt be a problem.

EdInvestor

Please post the maturity forecasts.

What exactly does the £1,300 apply to if there is no GSA?

Is there a mortgage promise amount?