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To Pay Off, Or Not To Pay Off (that is the question)
JollyJackTar
Posts: 1 Newbie
If it's too good to be true, then it normally it is !
We have an endowment policy that we originally took out against an interest only mortgage - many moons ago. Since then we have changed to a normal repayment mortgage - but have kept paying into the endowment policy with a view to enjoying the lump sum at maturity. However, the cash-in value of the endowment mortgage is NOW equal to the outstanding balance on the mortgage.
The mortgage and the endowment policy have 7 years left to run. There are no penalties for early redemption of the mortgage.
It seems like a 'no brainer' - use the cash in value to pay-off (END!!) the mortgage.
I appeal to you clever people out there - is there a catch? (...and what is it?)
We have an endowment policy that we originally took out against an interest only mortgage - many moons ago. Since then we have changed to a normal repayment mortgage - but have kept paying into the endowment policy with a view to enjoying the lump sum at maturity. However, the cash-in value of the endowment mortgage is NOW equal to the outstanding balance on the mortgage.
The mortgage and the endowment policy have 7 years left to run. There are no penalties for early redemption of the mortgage.
It seems like a 'no brainer' - use the cash in value to pay-off (END!!) the mortgage.
I appeal to you clever people out there - is there a catch? (...and what is it?)
0
Comments
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How much will the mortgage cost you over the next 7 years? How much extra will the endowment be worth at full term?
A simplistic comparison but it should give you some idea of whether paying off early is worth considering.0 -
To me, the 'no brainer' is whatever gives you the best return on your money
- What's your mortgage interest rate?
- What is the growth/rate of return on your endowment?
- Could the money be better used elsewhere to generate income, or reduce your current expenses (for example, different investments, or home repairs/improvements)?
If you're 'mortgage neutral' already, you should be in no rush to make your mind up, take the time you need :beer:0
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