Should we change our mortgage or sit it out?

timeou

Our situation



82k mortgage (74k interest only, 8k repayment)

Due to finish in Sept 2019

34k endowment with Standard Life set to pay out in July 2017 (currently 12k shortfall)

40k Endowment with Phoenix? (is it still Phoenix??) due to pay out in Sept 2019 (currently about 8k shortfall)

We are on a ten yr fix with Nationwide at 5.69% which is due to finish in July 2017

What on earth to do? Should we remortgage now to cover the shortfall? Wait to see what happens? Could we save by changing to a different product I'm so confused by it all. We comfortably meet the repayments at the moment (our annual joint salary is around 44k) and the house is worth about £150k

Any pointers please - its all a bit of a minefield.....thank you xx

TonyRimmer

Hi

Just contact Ntionwide and ask them to change your mortgage mix so that the endowment shortfall is changed to repayment

If your repayments are too high you could ask to extend the term to fit with your budget

Hope that helps

Tony

timeou

Thanks Tony, I wasnt sure whether we needed to actually move mortgage providers to get a better deal to suck up the shortfall. I guess to stay with the nationwide would be the sensible option though x

JimmyTheWig

There's two questions which are sort of separate.

1. Are you on a decent mortgage?
2. How can you pay off some of the capital?


My thoughts...

1. It's quite a high rate. But it's not a huge mortgage, so the rate isn't as important to you as it is for many people.
You wuold need to consider any early repayment charge as well as any fees for a new mortgage.
Might or might not be worth it.

2. The easiest way would be to switch to part repayment, part interest only. If you could afford to switch to full repayment then this would save you loads of money and you could then spend the endowment payouts on something else. But part and part is probably more practical in terms of affordability. They will probably let you do this but they might charge you to do so.
Alternatively, are you allowed to make overpayments with no penalty? If so, you can just do this every now and again to bring your balance down.