What to do with the Endowment cash?

Makela2009

My partner and I have a policy maturing in April. It is a £17000 endowment which began bought 25yrs ago. The projected value came through tis week ay £13058 - though i do appreciate this does not include the final bonus.

We have a second endowment (£8000) maturing in Jan 2016 which is when the mortgage is due to be paid off.

In the meantime, i am looking for advice on what to do with the £13000. Our mortgage is interest only (just over £25k to pay) - would it be worth swapping to repayment mortgage at this point?

Or is it better to put the funds in our ISA's, plus an additional savings account please.

kingstreet

What's the mortgage rate?

If the mortgage rate is higher, pay it off the mortgage and use the money you will save on the mortgage payments and endowment premiums to overpay the remaining mortgage faster.

If savings rates are higher consider getting a better rate by saving and continuing the mortgage as it is.

Finally, if your mortgage has an "offset" option, you could put the money in the offset account and save yourself the interest on that, using the saving to overpay the mortgage again.

holly_hobby

Remember, if you are both exposed to tax on income (and investing in anything other than ISAs), to compare your NET savings rate of the product (esp if a higher rate tax payer), against the mge interest rate being applied to your borrowings.

Important to keep an eye on any future increases to your mge payrate, and to be mindful that if your chargeable interest meets or exceeds your net investment return, you should then use the capital to reduce your mge borrowings accordingly.

Hope this helps

Holly