Paying down the mortgage

beeeater67

We have a mortgage of £170,000 with £140,000 on endowment and £30,000 on repayment. Current rate is around 6%.
the endowments mature in 5 years but will leave a substantial shortfall.
We now wish to reduce the mortgage with a one off payment of £20,000 (no penalty will be incurred).
What should we consider in deciding whether to reduce the repayment or the endowment element(s):j

Charlton_King

I imagine much would depend on whether you would be able/allowed to make any future overpayments and what your plans are in that regard.

Personally I'd be tempted to knock the £20k off the repayment side so that this element would terminate sooner and you could then concentrate on 'making up the difference' on the endowment portion.

beeeater67

Thanks for your comment, Charlton King.
the terms of our mortgage are that we can make any overpayment at any time without penalty