Can anyone see something I am missing.

Treading_Water

Hi All.
I have an endowment that has been running for 16 years - it is just now looking like making the same amount I have paid into it (about £20,000). The best predictions at 6% say that in 9 years time there will be a £20,000 shortfall on my mortgage.
I have worked out that if I cash it in and pay the £20,000 off my mortgage and carry on paying the same amount I am now I will be at worst in the same situation I am now and possibly a bit better off, particularly as I anticipate being able to pay another lump sum in a year or 2.
I am also struggling a little bit due to personal circumstances and the £100 plus saved will make all the difference. I have factored in taking out a critical care policy to cover the lump sum should something happen to me.
Anything else I should consider?

Thanks

TrickyDicky101

Treading_Water wrote: »

I have worked out that if I cash it in and pay the £20,000 off my mortgage and carry on paying the same amount I am now I will be at worst in the same situation I am now and possibly a bit better off, particularly as I anticipate being able to pay another lump sum in a year or 2.

I am also struggling a little bit due to personal circumstances and the £100 plus saved will make all the difference. I have factored in taking out a critical care policy to cover the lump sum should something happen to me.
Anything else I should consider?

Thanks

Surely these two statements are contradictory? Either you pay in the same or you don't?

Treading_Water

Not including the endowment. Sorry I meant not reducing the mortgage payment to take account of the new balance.

TrickyDicky101

On the assumption that pay off endowment value now + continue with existing mortgage payments (which previously only covered the interest on the debt) and assuming you don't need any additional life assurance benefits of the endowment over and above what you intend to source elsewhere, you would effectively be removing one element of risk and making the outcome (shortfall) that little bit more certain. I would be tempted to cash the endowment in and pay down the mortgager under these circumstances (ie as you have suggested).

If you will still be left with the £20k shortfall on your mortgage in 9 years' time then you should probably be thinking about how you will deal with that now.

Treading_Water

I anticipate being able to overpay another lump sum in a year or 2 and possibly again in 4 years (approximately). So don't think I need to panic just yet!!
Of course if I were to overpay the mortgage by the sum I am currently paying to the endowment that would go some way to helping, but I think at this current time I would prefer to keep the extra funds.
(It may alleviate the need to borrow some money off my Mum before the years is out - which is what I am looking at now).:(