endowment decision - what to do?

the_cat

Hi all

Have found this forum in the last few days and have been avidly reading all the diaries etc and feeling extra motivated now to pay off my mortgage.

I have therefore been looking at my endowment policy. If I surrender it now and pay off a lump sum I will be left with just about a £10k mortgage which I could clear in a few months due to a share issue at work.

But if the predictions are correct I could make between £1000 and £4000 extra in the long term if I leave the policy alone (obviously no guarantee but done on 5% growth)

I'm soooooooooooooooo tempted. Should I do it or not?

Any advice welcomed

zekepes

Tough one to answer!

I would look at how much interest and payments it would save you paying off now (when is that?) and compare it to the possible increased growth.

I don't know too much about endowments, despite cashing mine in ages ago, so beyond the fact that my mortgage rate is currenlty 6.75% and you are only getting 5% estimated growth on the endowment - which seems like a no-brainer on the surface.....

I guess we need more details from you?

EdInvestor

Post some info about the endowment.There are big variations in quality now, and some of them certainly should be binned, while others are worth keeping - so it's worth doing the sums.

Provider
Guaranteed sum assured
Declared bonuses
Surrender value
Monthly payment
Maturity date
Maturity forecasts
Interest rate payable on mortgage.