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Endowment - Surrender or fight on??
ubique_2
Posts: 1 Newbie
Hi first post after a while lurking.
I have a question which I hope someone can answer.
I currently have a £53000 mortgage which is made up of £15000 interest only and £38000 repayment. The mortgage has 9 years left to run although I would like to clear it as quickly as I can. I currently overpay a small amount and have been doing so for a couple of years.
I have 2 Standard Life endowments:
1. £35 per month matures Jan 15 current surrender value £14600. The projected maturity value is between £16900 and £18500. This endowment doesn't have a mortgage endowment promise.
2. £19 per month matures Feb 16 current surrender value £6800. The projected maturity value is between £8300 and £9400. I may also get a Mortgage Endowment Promise payment of between £1120 and £1600.
I am minded to surrender the the first endowment and pay up the £15000 IO part of the mortgage. To my (very limited!!) mind it seems to make sound economic sense as I can then use the £35 I save from the endowment payment and the interest I pay on the IO part of the mortgage (around £49 by my reckoning) to overpay so reducing my capital and therefore the mortgage term. I would keep the second endowment going and use it as a lump sum off the remaining mortgage in 2016.
Are there any flaws in my master plan?
I have a question which I hope someone can answer.
I currently have a £53000 mortgage which is made up of £15000 interest only and £38000 repayment. The mortgage has 9 years left to run although I would like to clear it as quickly as I can. I currently overpay a small amount and have been doing so for a couple of years.
I have 2 Standard Life endowments:
1. £35 per month matures Jan 15 current surrender value £14600. The projected maturity value is between £16900 and £18500. This endowment doesn't have a mortgage endowment promise.
2. £19 per month matures Feb 16 current surrender value £6800. The projected maturity value is between £8300 and £9400. I may also get a Mortgage Endowment Promise payment of between £1120 and £1600.
I am minded to surrender the the first endowment and pay up the £15000 IO part of the mortgage. To my (very limited!!) mind it seems to make sound economic sense as I can then use the £35 I save from the endowment payment and the interest I pay on the IO part of the mortgage (around £49 by my reckoning) to overpay so reducing my capital and therefore the mortgage term. I would keep the second endowment going and use it as a lump sum off the remaining mortgage in 2016.
Are there any flaws in my master plan?
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