Should I Sell My Endowment

TOOTY_2

hello all can any one advise on the following.

I have 65 months left to run on my Aviva Policy and the financial details are as follows as of 07/07/2011
I have tried to sell the Policy to AAP but they not interested as are most private buyers as it is a with profits policy based on stock market results and the bonuses (if any) are at the company discretion.

start date 0/12/1991 end 10/12/2016
Sum Assured= £11,358
Total bonuses to date= £6401.00
Bonus allocated for 2010 = £699.96
Monthly Payment = £52.59
Current Value = £18416.22
Target Amount = £39990
Surrender Value = £16113
Built in Mortgage Promise = £6990 to be paid on top of my final (if any added ) bonuses
Current Mortgage outstanding = £27200
being paid at £154 per month repayment with HSBC Tracker 1.89% above BoE base rate

re-mortgaged some time ago so this has 19 years left to run but was hoping to clear my mortgage at the end of the 65 month period whilst still chipping away with the repayment mortgage.

would it be wiser to surrender the policy pay the 16k off the 27000 balance and just chip away at the 11000 outstanding mortgage.

any advice or ideas most welcome

Peelerfart

That is roughly what I did - sell the endowments,and the uncertainty that went with them and pay the mortgage down with the proceeds. Not saying it was the right thing to do, allthough it did feel right then,and still does now.

If you had an 11K mortgage, carried on paying at the 27K rate,and carried on paying the endowmwnt premium as overpayment,I would guess your mortgage would dissappear PDQ.

please do the maths and work it out for yourself

Good Luck
PF

Peelerfart

Dont bother just done it for you - Mortgage free in 4.7 years,sounds good to me !

assumin no interest rises but hey !

dunstonh

The Aviva MEP is being paid and is fully funded. Plus, Aviva WP returns are currently running higher than your mortgage interest rate.

Cost of surrender is £2303. Loss of MEP is £6990. Total loss on surrender is £9293. So, would the alternative option make up that £9293 in the remainder of the term?

Richie(UK)

Well, one thing that leaps out at me:

65 months at £52.59 is a further outlay of £3,418.35

to 'save' that amount you would be sacrificing a 'promise' of £6,990.00

That doesn't seem like a good swap to me.

geedee64

i guess the question is - what is the reduction in your monthly mortgage payments if (a) you took the current £16k surrender value to pay off a chunk of your mortgage now, or (b) you continued paying in and used the value at maturity in 5 years time - whatever that value might be?