Switch to repayment, pay off lump sum from surrender

doozeruk

Hi

I had some fine financial help on these boards for my sister last month, now I would like some advice for myself if possible please......

I have a mortgage of £36500 and my property is currently worth £105,000. I have an endowment mortgage @ £50 per month and I am paying a fixed rate to Barclays until June this year for the interest, although the mortgage runs for another 15 years. I also have another endowment type policy which I took out to cover the shortfall I am guaranteed!

I have just been told that we are to recieve £1500 from my endowment company for the miss selling of their product to me 11 years ago, and they said that at the time we would have been better off with a repayment, thanks then! They also mentioned the surrender value of our current policy for around £6000, and said that we could still move to a repayment mortgage for the remaining term and they would pay any fees incurred.

I thought that by using the surrender and miss selling monies (£7,500) I could put them towards a new repayment mortgage and thereby reduce the mortgage to £29,000.

Would I be able to do this and would it be a good idea?

Many thanks in advance, I just wish I was more clever with my money

herbiesjp

yes you can put them towards a new repayment mortgage if you wish. As to whether it is a good idea depends on how you feel about your mortgage, and whether the new monthly cost would be affordable.

If you want to finish your mortgage as soon as possible it might be an idea, affordability allowing, to reduce the term of the mortgage also and have it all cleared very quickly.