Mortgage shortfall in 9 years. What options do i have?

Thrugelmir

Best to start a new thread.

Sirlaughalot

With just over 5 years to run the endowment policy has finally shown signs of life and has started to outperform the stock market.

The facts can be viewed here

https://forums.moneysavingexpert.com/discussion/5746625

getmore4less

did you manage any of those £180pm overpayments required to meet the shortfall?

As you had a £14k coming within a year <£100pm would have closed the gap and a good chance the lender would let that carry over till the payout.

Sirlaughalot

getmore4less wrote: »

did you manage any of those £180pm overpayments required to meet the shortfall?

As you had a £14k coming within a year <£100pm would have closed the gap and a good chance the lender would let that carry over till the payout.

I looked at my interest payments @ 1.25% for the mortgage and looked at saving options at rates above that. Some regular saving accounts paying 5.0% (2.6 % on average) and decided to save regularly instead. It was a gamble but worked.

I have made a considerable sum and will now repay a lot of the shortfall off in bulk. But with 5 years to run and interest rates likely to rise i may well surrender the endowment and make overpayments on the mortgage for the remaining 5 years.

Play safe just in case the markets crash again over the next 5 years

getmore4less

overpay/save if better rate amounts, to the same thing just needs the money not spending, good you worked that out.

I realized yesterday that the amount needed was quite low with a 9y+1y option and needing to cover £22k with overpayments and £14k

With a rate of 1.25% on the £22k the interest only was £23

To clear the amount to £0 in 9 years £216(£193 more)
To clear the amount to £14k in 10 years £86pm(£60pm more) and at year 9 owed £14800

now at the end of Y9 you would have had the full normal payment for a year that would mean the amount needed was even less.

eg if a £122k mortgage the payment on the £100k would have been around £100

With £123+overpayment+endowment available in Y10

if we just add the overpayment the overpayment becomes £74 and Y9 year target becomes £16200.

if the mortgage was bigger and the endowment payment added the overpayment required becomes even less.

with such a small amount outstanding unless a lot changed in the 9 years lender would let it run another year at end of Y9