Endowment Mortgage Advice

moggie228

I've serious reservations about my endowment mortgage, and whilst I'm in the process of trying to find a good financial advisor, just thought I'd run it by you guys on this board, The policy was originally sold by countrywide and is currently underperforming, They recomended I upped the repayments this year which I did (not sure I dii the right thing), is it worth selling this policy and transferring the whole mortgage onto a repayment mortgage, My mortgage is 10000 on repayment, 58000 on interest only, My current mortgage is with Skipton and I'm looking to remortgage and basically wondering whether to remortgage and change the whole mortgage over to a repayment, Sorry if this sounds a bit muddled, Jacqui

Annisele

Remember that, technically, there's no such thing as an 'endowment mortgage'. What you have is an interest only mortgage supported by an endowment policy. The mortgage and the policy are separate products, so (if you wanted to) you could switch some or all of your mortgage to repayment without cashing in the policy.

So far as I remember all of Countrywide's policies are unit linked, so you won't have the option of selling it - you can either cash it in, keep paying the premiums, or make it paid up (stop paying the premiums and hope that the surrender value grows).

Afraid I can't give you advice though. If you are risk-averse, then you'd probably want to surrender the policy, use the proceeds to pay off part of your mortgage, and then convert the entire mortgage to repayment.

If you're not risk averse, then the best option for you depends on what you think future investment returns are going to be like compared with the interest rate you'll be paying on your mortgage.