selling endowments to pay off mortgage

daft_dad

Hi evey one
Is this advisable? It seems a safe bet! Or am I missing something?
Mortgage £36.5k interest only @5.99% fixed until Jul 2009 equates to £182 x 12 x 8 = £17.5k (can pay off 10% every year with no penalties)
Matures 2015 endowment STD life current surrender Val = £5k @ £18 x 12 x 8 = £1728
Matures 2015 endowment Pru current surrender Val = £23k @ £30 x 12 x 8 = £2880
Total cost out of my own pocket over 8 years £22.1k
Investment £18k @5.75% gross in non tax paying account + (STD life surrender) £5k + (Pru £27k selling) = £50k cash
Mortgage + early repayment charge of £1.15k = £37.6k
Surrender/sell endowments and pay off mortgage??
£50k -£37.6k = £12.4k
Invest this until 2015 + (£182+£18+£30 per month = £22.1k)
Even in a 3% interest account that would equate to £40.5k at the end of the 8 years!!
What do you all think?? Am I missing something major hear??

woodyserve

not such a daft dad assuming your no's are right ?
I do not trust their investments to hit the numbers,no recent track record says they will - and your monthly costs keep going up ?
I have gone thro same logic,assume you do not need life insurance ?
however the surrender process takes much longer than you expect if you do not sell back to policy provider.if you sell to a higher value provider then your into a 4 to 6 month process whilst the broker markets your policy in a portfolio.lots of paperwork to do with broker and their lawyers.
you also have to keep up the monthly payments with policy provider which the broker say they will refund from the point they accepted the docs ?
depends how quick you want the money - if quick sell back to your policy provider - sounds like less hassle too !!
good luck

dunstonh

Pru endowments have yet to fail to hit target and the average surplus was £3300 in 2006 (up from £2200 in 2005).

Standard Life endowments dont include the terminal bonus or mortgage promise value in the projections (the former is usually missing from projections). Plus, some of their early ones project from a lower figure giving artificially lower projections.

Pru bonus rates, including terminal bonus are beating 5.75% and standard life are close but could be higher if you include your mortgage promise value.