Cashing in an endownment policy

getridofmydebt

I have just received a surrender value for a policy i hold with Aviva it used to be a Norwich Union policy.Because it was performing poorly i was going to use the funds to clear one of my credit cards then overpay on my mortgage the payments i was making to the card company and the policy premiums.
When reading the letter from Aviva it says the policy is assigned to my mortgage company. Does this mean i can not surrender the policy? or does it mean i can not surrender without there permission? the policy has been running for 13 years with 12 left to maturity.

Annisele

It means that you can't surrender the policy without your lender's permission.

If your mortgage is interest only, then your lender probably won't give permission unless you convert to repayment. If you can demonstrate that you have some other way to repay your mortgage (not just that you have an intention to overpay) then they *might* give permission.

If you use the surrender value to reduce the balance of your mortgage and switch to repayment over the remaining term, then your lender is almost certain to give permission.

Who is your lender?

getridofmydebt

My lender is Norwich & Peterborugh. Took out 135k mortgage in 1997. 85k on repayment and 50K interest only.Currently owe abot 125k in total. Interest rate is 3% (lifetime tracker BOE +0.5% but they have a floor level of 3%)
I know they are favourable to let you increase more to reapyment but would how do they look on changing back to IO when interest rates go back up?
By the way been paying into the endownment premiums of £55 per month and current surrender value is £7300. Policy been running for 13 years.