Change to repayment from endowment??

Geoff_J

HI
Took an endowment mortgage out 14 years ago when got married as that was the only main option its only 40k and with 11 years left I was wondering if I should remortgage for repayment as have 30K in savings t put down and could pay the lot off in 3 years and keep endowment to mature in 11 years giving 40k back. does this sound like the sensible option.

Many Thanks
Geoff

Trying_to_be_good

Geoff

Welcome to MSE!

I would think it depends on whether you savings are earning more interest (after tax) than you're paying on the mortgage, whether you have easy access to enough 'emergency' savings (somewhere on here it recommends 3 to 6 months' outgoings). Then whether the endowment is forecasting enough to cover the mortgage, and whether you'd simply prefer to pay off a chunk of your mortgage. I did!

SandC

I was in a similar situation a couple of years back. Small mortgage to start with so wouldn't have been the end of the world finding the shortfall of the endowment at the 25 year stage, but I just wanted to see my loan reduce so I cashed in the endowment and paid that off the balance, switched to repayment with the same number of years left to go and the payments worked out about the same as I had been paying before (with the monthly endowment).

I am now overpaying a bit and have 8.5 years left and can visibly see it reducing every time I log on to my online account. It's very satisfying!

In your situation the money in your endowment would work better elsewhere, I'm sure, perhaps get some advice from an IFA.

Either way you can perhaps use half your savings to reduce your mortgage, switch to repayment anyway and then the funds from your endowment fund as it stands can replace the savings. Start overpaying as an option also.

Geoff_J

Thanks for your advice.
I will book an IFA as the more I think about it I could be mortgage free within 3 years and have no credit card bills etc. Im also working in a secure job.