Aviva Mortgage cash in now?

paul_k_4

Hi everyone newbie here looks like a very useful forum.

I have an Aviva PM Flexible Mortgage Endowment plan (Aviva managed PM PL fund)taken out in June 87 originally over 25 years, with a death benefit of £45,200. I am paying £31.83 per month.(This is the amount it should have been worth after 25 years)

The current fund value is £14,659.

The projection in another 1 year and 7 months are (ie 25 years):

4% £14300
6% £14,700
8% £15100

My question is should I cash this in now as I very much doubt this will grow by even 6% so I seem to be paying nearly all my money to Aviva.

Note this policy has a 80% redemption value (in the very small print)if cashed in before you are 80 years old which I was not told about.

Cheers


Paul

dunstonh

Is there a mortgage endowment promise value (MEP)? Most Aviva plans have one.

paul_k_4

I don't think so...

This was originally a Provident mutual policy which was taken over by Norwich Union then Aviva.

I guess the real question is where are graphs of the unit funds over the last 25 years for:

Aviva managed (PM PL) life standard series 01 (1287 units)
Aviva managed (PM PL) life initial series 01 (542 units)

Cheers



Paul

Burridge60

There is some number crunching to be done but a lot of unknown elements like future growth and future interest rates, as well as the loss of life cover and your state of health etc need to be thought about.

I have done it with my own endowments and the wife then overruled me on the "what if they got better idea and the life cover"!

Get an accurate cash in value for the plan (there will be some loss to compensate for having the money earlier than the maturity date of the plan). Assume that you pay this off your mortgage (if you can do this without penalty) and calculate the interest saving between now and the maturity date add to that the premiums saved (although this would be better used to overpay your mortgage) and then add the Cash in figure.

Then deduct the total remaining premiums from the guaranteed payout on maturity or one of the projected figures if you are feeling lucky.

Compare the two figures. Is a bird in the hand worth two in the bush?

You cant value the loss of the life cover attached to the policy and nor will you know one way or the other which was better until interest rates and growth in the future are known. So you wont ever know!

Good luck and don't ditch them without a lot of thought and maybe some independent advice.