Cashing in endowment to pay off mortgage early???

lobster123

Hi,

I'm hoping that someone can offer my some advice please.

I took out a 25 year interest only mortgage with the Bank of Scotland 21 years ago for the sum of £32,000. I have an endowment for the same sum with Standard Life.

I have managed to pay off some of the mortgage through additional monthly payments and my current balance is £23,300. My monthly repayment is £78. My endowments (I have 2 for £5,000 and £27,500) cost me £10 and £35 per month.

I looked at the current surrender value of my endowments and have been quoted £2,630 which includes a £519 final bonus and £12,721 which includes a £2,118 final bonus. A total of £15,351 if I cash in just now.

I'm in the position of having some savings and can afford to pay the balance of £8,000 to be mortgage free. However, is this a wise move?

The estimated value of my policies at the end of term are (low, intermediate and high):

£3,480 £3,730 £3,980 (£5,000 policy)
£15,800 £16,900 £17,900 (£27,500 policy)

I'm not really sure what the pros and cons of paying early are to be honest. I'm assuming that my bank may charge me for paying the mortgage off early? Will I save money in the long run?

Thank you so much in advance.

holly_hobby

Do your policies (both SL I presume) qualify for the Standard Life Mortgage Endowment Promise (MEP) ?

http://www.standardlife.co.uk/1/site/uk/fund-info/with-profits/mep#category1288004771889-4

Hope this helps

Holly

vectistim

Are they solely with profits, or do they have a mix of with profits and investment funds?

What rate are you paying on the mortgage?