Please help me know what to do about my endowment!

loveka

We bought our house with an interest only mortgage 16 years ago, so we have 9 years left.We took out an endowment at the same time, which we pay £250 a month into. The endowment is on track to pay off the mortgage in 9 years, assuming a 3% growth. The mortgage is 125k.

My question is, did most people who took out these endowments at the time get rid off them and go on a repayment mortgage? Have we been fools to carry on with it?

If we were to cash in the endowment now we would get 75k. We have 50k savings, so we could in theory either pay off the mortgage, or, if we wanted to keep the savings, have a much lower mortgage. Would either of these be sensible?

Thanks!

silvercar

Always always leave yourself some money in savings. You never know what is round the corner.

Work out what else that £250 a month could earn for you compared to keeping the endowment going and go from there.

there is usually a 3rd option of making the endowment paid up. That means you don't make any more payments, but the money invested up to now continues in the policy until it ends.

Don't forget that the endowment policy includes life insurance.

Thrugelmir

What rate of interest are you paying on your mortgage?

scott_lithgows

Left the endowment till it matured,with a mix of overpayments and a few thousand changed to repayment I was left with a shortfall of £170 on that part of the mortgage.
If the endowment had taken me to retirement I would have heavily overpayed the mortgage but kept the endowment going
Good luck

loveka

Our interest rate is 3.19. As it's interest only that's the best we could get!