Should I cash in endowment to clear credit card

Flo_B

My husband and I have a mortgage with 11 years left to run and was originally and endowment mortgage but since changed to partial repayment - currently stands at £100,000 and is split that £30,000 is interest only - rest repayment with a local building society on variable rate which is 2.5% - currently our endowment is £99 per month and today's surrender value is £21,600 - we are currently struggling with a credit card debts of £15,000 at 27.44% pa - wondering whether it would be sensible to cash in endowment and pay off this debt considering interest and only making minimum payments - we have more than adequate life cover in place via other policies - can anyone give their advice - unfortunately we are a bit confused .....I assume I could put an adequate amount away and as long as we saved to £30,000 interest only portion that would be all that would be outstanding at end of mortgage term - am I right in my assumptions?

Thrugelmir

If you cash in the endowment policy. My personal recommendation would be (a) use the excess cash after clearing your debts to reduce the interest only part of your mortgage (b) switch the remaining interest only balance onto a repayment basis.

This would then guarantee repayment of the mortgage by the end of the term. Also imposing on you the discipline to manage your money going forwards.

Little point cashing in the policy if you don't follow through with a proper plan.

StuC75

Agree with it needing to be part of longer term plan, also is the endowment 'assigned' to the mortgage company - would they not usually receive the funds in the first instance anyway?? Or is it something you have had in place separately??

price up what the extra £30k on repayment for the 11 years would be. so you know what that will cost to catch up on over the years.