endowment payout does not clear debt. What now?

femalegannet

Hi, I'm new to forums but thought I'd ask the question as I can't find any topics like this.
Our mortgage is 20 years old and was initially endowment only. Over the years 'with financial advice' we changed to part repayment and part endowment to offset the poor returns. We changed lender 4 years ago to an interest only (again with advice) after reducing it by and are down to our last endowment payout.
we will be left with a 4.5k shortfall.
I'm not keen on paying for more financial advice and was going to talk to the lender. Is there anything we should do about this? :cool:

Martins email is well read and used frequently!

maninthestreet

Why did you change from part-repayment to interest-only 4 years ago?

femalegannet

The change 4 years ago was to interest only , I think because the endowments were looking as tho they would cover it.
we changed to endowment/repayment about 10 years ago.

Annisele

Your lender will almost certainly be happy with you converting the remaining £4.5k of your mortgage to repayment, over a relatively short extended term. Ask them and see!

Or, if you have £4.5k savings elsewhere, it might be worth using that money to make up the shortfall - it depends on the rate of return you're getting on the savings compared with the mortgage rate.

rhysvw

Change the shortfall to repayment or use savings to repay the debt also lender may extend the term to keep payments affordable if need be as you change oart to repayment monthly payments increase.

Also have you challanged the endowment provider on the performance raise a complaint as you were led to believe it would repay the mortgage in full from what i'v read.

femalegannet

thanks for your replies, they make sense.
re: endowment we asked our advisor about challenging nat west but he said at the time we were prob given good advice but the market has changed. we trusted him so left it.