What to do pay it up or not

dwf49

Hi All
Sorry if this is a daft question We have a morgage which will have 3 years to run from Dec 1st (repayment) when we come out of our deal we also have a old endowment which we froze when we went to repayment its worth £17,857.06 and would pay off what we owe the endowment has gone up aprox £700 in the last 6 months we have been in to see the bank and our repayments from dec on the morgage would be £478 per month on the standard rate (for 3 years) maybe it will go up and down a bit we would like to pay it off because we could then afford a small loan £5000 for a new car (£149 per month for 3 years from nationwide) dont understand the endowment but it says mixed fund so many units any help/advise would be great thanks
Dave

dwf49

Anyone any ideas
thanks

themull1

i don't relly understand the question. will your mortgage only have three years left to run? or is it a three year deal with some mortgage to pay when the deal finishes? would the endowment payment cover the entire mortgage arrears?

dimbo61

You dont give the interest rate on the mortgage now or from the 1 dec 2010 nor do you give the interest rate of the loan ?
Now you have an endowment worth £17,857 which you say would clear the mortgage.
There is no point in borrowing £5000 from Nationwide at 8/9/10% over 3 years when the SVR of you mortgage is likely to be 5% at most.
So when you cash in the endowment use some to buy the car and the rest to clear a large part off the mortgage.
If you keep the mortgage payment the same you will soon have the mortgage cleared.