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What to do pay it up or not

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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

Comments

  • dwf49
    dwf49 Posts: 14 Forumite
    Anyone any ideas
    thanks
  • themull1
    themull1 Posts: 4,299 Forumite
    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
    dimbo61 Posts: 13,727 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    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.
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