pay off part of the mortgage or buy ISAs

chrisgd_2

I have a mortgage of £115, 00 it’s made up of £60,000 repayment and £55,000 Endowment mortgage. The Endowment part has 2 years to run and the repayment 6 years.
It’s very unlikely my endowments will reach the target of £55, 000, could be up to £12,000 short fall.
The point of the post is, I’m due for a tax free windfall of £20,000, do I pay it all towards the repayment part of the mortgage or buy ISAs, tying the money for 2 years after which I could the pay off any shortfall on the endowments.

Cheers
Chrisgd

claretmatt

In two years you will need to pay off the £55,000 interest only mortgage or remortgage some or all of it.

If you pay £20,000 off the repayment part then you are limiting the options you would have in two years.

For some clients I have recommended they encash their endowments pay it off the mortgage and convert all to repayment. I have found in some instances that the repayment monthly cost is less than the endowment and the interest only payment.

Might be worth investigating