Cashing in Endowment early to pay mortgage

bigscooby

I was looking some advice. I currently pay £160 pounds per month into my Standard Life Endowment. I have been paying this for 19 years and its now worth £43,000. I currently owe £58,000 on mortgage after paying some off with savings over the last few years. My 4 year fixed rate has come to an end and i was thinking of using a further £15,000 of my savings to get shot of this ball and chain from around my foot. I know that i would lose a terminal bonus and life insurance etc. Any advice much appreciated

TrickyDicky101

What kind of endowment is it? Is it Unit Linked, traditional With Profits or perhaps unitised With Profits? Terminal bonus only applies to the latter two so if it is a UL product then that particular consideration does not apply.

dunstonh

know that i would lose a terminal bonus and life insurance etc.

And the mortgage endowment promise would be lost.

How much is the cost of surrendering and giving up these things vs keeping it?

bigscooby

Its a Standard Life with profits endowment.


I don't think that the mortgage endowment promise means anything. I think they managed to worm their way out of that. If I surrender it now I can pay my mortgage off, if I keep it its anyone's guess how much it will be worth in 6 years time. For years now it has either been red or amber meaning significant shortfall (hence the overpayments on my part) however the last year has been better due to the rise in the stock markets.

dimbo61

Was the Life assurance part to cover the mortgage?
So if you pay off the mortgage NOT NEEDED !
What Interest rate are you paying on the mortgage?
What interest rate are you getting from your savings ?
What Interest rate does the mortgage go to at the end of the FIX

dunstonh

I don't think that the mortgage endowment promise means anything. I think they managed to worm their way out of that.

Why do you think that?
The MEP is fully funded and they are paying it on the maturities I have seen.

For years now it has either been red or amber meaning significant shortfall

However, that does not mean it is doing badly. Projections are artificial and currently understating likely returns. Some SL plans also project from the surrender value and not the current value and none of them include the MEP that may apply.