Endowment matured

Turtle011

So, the 25 years are finally up and the endowment policies have produced enough cash to pay off the interest only mortgage. However, there's actually few months before the mortgage end date. The mortgage interest rate is a crazy 0.25%, and the money sitting in my holding account waiting to pay it is earning 2.25%. The difference is a nice little earner each month,

But my question is... do I legally have to repay it when it comes due? If I didn't pay it off would I have to renegotiate a new mortgage? And would they let me? I don't work. My wife earns, but would retire in 10 years or so.

jaybeetoo

You have to pay it off when it becomes due. You could ask your lender for an end date extension. They may or may not charge you a fee for this.

With my interest only mortgage, my lender (First Direct) has told me I can extend until I am 65. I guess this may change as the retirement is age is changing to 66.

kingstreet

If the plan(s) is/are assigned, the proceeds belong to the lender. If not, they belong to you. You would continue to pay the required interest until the end of the mortgage term, repay then, or negotiate a new deal with that, or another lender.