Is your endowment linked to your mortgage?

thomasperfecto

I'm just wondering if poeple still have endowments in place to pay of the mortgage or if you have switched to re-payment and kept the policy as an investment.

dunstonh

Technically, endowments are seperate from mortgages so everyone should be answering number 3 if they have an endowment.

Does it really matter what other people are doing?

Some will be keeping theirs as they are good ones. Some will be keeping theirs because they think theirs is good when it isnt. Some will sell/surrender theirs because they think theirs is naff when it isnt. Some will sell/surrender theirs because it it naff.

Are you also including savings endomwents or just mortgage endowments?

GreenNinja

Hi Thomas,

Since discovering this site! my plan is this, keep the endowment as an investment, keep the mortgage as an interest only but do my best to pay off that over the next 12 years when the mortgage term finishes and the endowment matures.

Have just paid off my first amount, £3,000 and am ecstatic at my achievement! My monthly payment has reduced by 15.48 so that can only be a good thing!

:j :j :j :j

cm233lh

I'm in the process of switching to an offset repayment mortgage, so when the endowment pays out in 6 years it'll effectively pay off some of the mortgage, but I'm not banking on it. I might sell it in the mean time, but I there's so many variables I don't think I know how to decide whether that's a good idea or not. In 6 years time I won't have to decide any more. Whichever way I go, the offset account will effectively mean the money goes towards the mortgage at least in the short term.

EdInvestor

cm233lh wrote: »

I might sell it in the mean time, but I there's so many variables I don't think I know how to decide whether that's a good idea or not.

It's easy to make a check via https://www.apmm.org

As a rule of thumb

-If they won't offer you anything above the surrender value, it's duff and you should almost certainly junk it and use the money in a new ISA or to reduce the mortgage loan

-If they offer you up to 10% more, then it's likely sensible to sell unless you need the life cover

-if they offer you more than 10% it's probably a fair performer ( ie expect a 6% return or so), so you probably won't lose if you hold

- if they offer you more than 20%, then looks like it's a good performer, of which there are very few, if any. Choice is between bird in hand and bird in bush, but existence of actual bird is as certain as you can ever get with a risk based investment.

Gorgeous_George

dunstonh wrote: »

Technically, endowments are seperate from mortgages so everyone should be answering number 3 if they have an endowment...


...Are you also including savings endomwents or just mortgage endowments?

Don't those two sentences contradict each other?

My SL policy was taken out as an investment before being linked to my mortgage but is now not linked. A FP policy was linked initially but is also not linked any longer.

Will probably cash in the FP (APMM wouldn't offer any extra) as I doubt it will perform well and matures in 2019. APMM offered extra for the SL policy but, if it is worth more to them, I think I may as well keep it to maturity in January 2010 (just 28 more payments).



GG

dunstonh

Don't those two sentences contradict each other?

Savings endowments and mortgage endowments are built differently with a different weighting on the basic sum assured and/or life cover.

Neither however is part of your mortgage. Mortgage is one thing. Endowment is another.