Endowment Policy Maturing

lordupminster

Hi, I have 2 low cost endowment policies maturing at the end of June linked to my mortgage (part interest, part repayment).

My mortgage is due to finish in 2014.

Should I pay of the interest only bit with my policies or wait for the full term of the motgage to run its course?

dunstonh

Should I pay of the interest only bit with my policies or wait for the full term of the motgage to run its course?

Which option is best based on your figures? (we dont know your figures so cant say unless you post them)

kingstreet

Can you get a net return (on investing the money until 2014) which is higher than the rate you're paying on the mortgage?

lordupminster

Hi,

My combined policies will pay out around 26.5K on maturity which is just short of the 29K interest only I need to pay.

My total mortgage balance as of Sep 2010 was 45.3K

My current interets rate on my mortgage is 1.24%

Do you require anything else?

Thanks

dunstonh

My current interets rate on my mortgage is 1.24%

There is the key one.

You can get savings accounts that are paying more than 1.24% net. So, as long as you utilise one of those and keep it only for as long as the net savings rate is beating the mortgage rate then you are in pocket.

If you also continued to put aside the monthly amount you paid the endowment then better still as you wont miss what you were used to paying.

lordupminster

thanks all for your replies