mortgage advice needed

wiggle_3

we are in need of some advice regarding our mortgage.
we have a joint mortgage with the dunfermline bs and are free as of now to change.we have a £63,000 endowment mortgage with 10 years left to run and currently pay £390 (6.49%)
which is the best mortgage for us?
repayment or interest only?do we pay extra into it per month to benefit from the endowments when they pay out?
we have an endowment coming out in september 2007 for around £20,000.do we pay this into the mortgage??
we have seen a libor mortgage with skipton bs with 3.19% for 7 yrs which can be repayment or interest only .
hope someone can offer some advice.

lisyloo

which is the best mortgage for us?
repayment or interest only?do we pay extra into it per month to benefit from the endowments when they pay out?

What is the forecast for your endowment(s).
Will it pay off the mortgage or is there a shortfall?

Whether you pay extra in is entirely up to you but it's usually a good rate of return and is tax free and risk free.

we have an endowment coming out in september 2007 for around £20,000.do we pay this into the mortgage??

Is this one of your planned repayment vechicles.
If so then definitely.
If not then do you have any other debts?

we have seen a libor mortgage with skipton bs with 3.19% for 7 yrs which can be repayment or interest only .

This is linked to US interest rates and not UK ones so although it looks cheap there are some risks with it.
There are also high penalties and long tie ins.

If you are confident that US rates will stay low and are happy with the large penalties and tie-ins then it's fine.

If you don't have a view on US interest rates, then yuou either need to do some research or walk away.

Don't just take it on the basis of the low rate without understanding the risks and downsides.

lisyloo

If your endowments are forecast to pay off the mortgage then there is no need to get a repayment mortgage (as the endowments will pay off the capital).
Interest only will be fine.

Overpaying is a good idea, providing that you have sufficient tax free cash available for emergencies and providing that you have sufficient arrangements for pensions/retirement savings.

It might be worth your while talking through the options with a mortgage broker. They know the market and will be able to advise you.
Find one that doesn't charge you.
I think Martin has an article on this.

yonk

If you're near an ESPC office, you can discuss the options with one of their mortgage advisors.

They charge their fees to the lenders only on a fixed rate basis and have a good range of products.

(I don't work for them - just had some exceptional service & a good deal when remortgaging last year.)