Repaying mortgage early

jeannot18

Any mortgage expert on here? I have a mortgage which is made of 2 parts (For the same property). One on repayment and a second one which is part repayment part interest only. The first one cost me ~£590 per month, the second one ~£180 for the repayment part ( I have been doing some extra repayment on this) + £51.50 for the endowment part. On the first one i own currently approximately just under 50K, and the second one around 61K. The endowment is under-performing and will not meet the target at maturity. I may be getting some money which would be enough to pay one or the other. Both mortgages are on the same interest rate, no penalty on either to pay early, around 7 years and 7 months left. I have already remortgaged to a better interest rate (Nationwide), i think i have got just over a year on that rate and then it goes back to standard rate but i will probably look for another deal with the same bank to avoid fees, survey etc.


My idea was to pay the first one, be better off by £590 each month and pay some more towards the second part of the mortgage.Or do you think i should i pay off the second one (repayment and interest only). My long term plan is to pay off whatever we are short when we sell the property anyway. Thanks



J

Whats_your_forte

You would probably want to get some advice as to whether it is worth keeping the endowment on the basis that you've been told it is underperforming and will not meet the target at maturity. When obtaining this advice, work out whether it is worthwhile cashing the money in now rather than throwing bad money after bad.

You therefore have a large capital lump sum which could be paid against the second element of the mortgage and if out of the two mortgages you had a choice, with the fact the first element is on a formal structure, my personal choice would be to target that which was running an element of interest only as that has uncertainty around it for the next almost 8 years

jeannot18

Whats_your_forte wrote: »

You would probably want to get some advice as to whether it is worth keeping the endowment on the basis that you've been told it is underperforming and will not meet the target at maturity. When obtaining this advice, work out whether it is worthwhile cashing the money in now rather than throwing bad money after bad.

You therefore have a large capital lump sum which could be paid against the second element of the mortgage and if out of the two mortgages you had a choice, with the fact the first element is on a formal structure, my personal choice would be to target that which was running an element of interest only as that has uncertainty around it for the next almost 8 years

Thanks for replying, so just to be clear you are saying i should repay the one which is part repayment,part interest only, correct? Thank you
J

Thrugelmir

jeannot18 wrote: »

Thanks for replying, so just to be clear you are saying i should repay the one which is part repayment,part interest only, correct? Thank you
J

Personally I would. Then you can monitor the potential shortfall more easily.