Help to Release endowement and restructure mortgage

markdirect

A friend of mine is really getting stressed out as she thinks she is unable to get her endowment policy released by the bank (originally held as a security when she took out her endowment mortgage in 1988 about 18 years ago.

Having been through some hard times and unable to work through part disability she recently started a small business and (about 9 months trading) is doing ok, but needs to restructure her fianances .

Current Position

Mortgage £46k paying £214 pm interest only.
Bank hold endowment as security on this.
Self Employed < 1 year .
She can self Certify 15k per year
Rate svr 5.6% likely to go up soon
Pays £70 pm towards endowment on top

Position Sort

1 Get Endowement security released. Sell for £25k (have buyer) or hold

2 Change mortgage so on fixed interest rate for 5 year at < 6% (all costs)

3 Change mortgage so can pay off max possible over 5 years
on an increased realistic £350 per month payment plan (max)

Offset interest on Capital from endowment 6% on £25k = £125pm
against interest on mortgage due 6% on £46k = £230pm

Hence balance of interest to pay = £105pm . If £350 paid pm then now £245 going towards repaying mortgage.

After 5 years approx 14.7k paid on mortgage, without compounding and still have £25k in cash. Also have £70 per month payments on endowement now saved to invest approx 4.2k.

Can anybody advise on this. as currently she has to continue paying interest on mortgage and will still owe 46k in 5 years and paid 13.8k in interest. The bank isn't playing ball or helping regarding how this can be done . Well not in its interest?

Please help or advise route to action

Mr_helpful

Once she remortgages the bank can release the endowment. It shouldnt be much of a problem