Move with endowment mortgage

Mart12

Could someone please explain how it works if I have an endowment mortgage of £60K, due to finish in 12 months with a shortfall of about £10K. If I want to move house now, what will happen with the mortgage and shortfall? Would I be better waiting until it's finished which just seems a lot cleaner?
Thanks

dunstonh

Moving house has no impact on the endowment policy. That will be whatever it will be irrespective of the address you live in.

The only real issue is that you may have to stick with your existing borrower as 1 year is too short a term to move lenders.

Mart12

Thanks for your reply. So how exactly would it work? I find a house I like and agree to buy then what do I do about my new mortgage? My current mortage is with Direct Line and as far as I know, they no longer offer mortgages! Will I end up carrying on with the previous endowment until it finishes next year. Sorry, probably silly questions, but confused.

opinions4u

My suggestion would be to take the new mortgage on a full repayment basis and retain the endowment for life cover and a savings plan.

You could have a part endowment part repayment mortgage. The amount on interest only should reflect what you could reasonably expect on maturity. In this case £50k. But consider a lower figure.

If there's only a year to run you need to ensure that any lump sum can be paid off the debt without an ERC.