mortgage help

david69_2

Ive got 7 years and 7 months to go on my mortgage the figures are:
amount borrowed £64000
interst only £35000
monthly payment £537
interest rate 5.64 discounted rate until end of term


I want to reduce the interest only part by £5k to start with because I've got a crappy endownment that wont cover the £35k. is this the best way to help me pay my mortgage off early ?

Jonbvn

In order to answer your question you need to be more specific.

Any early payment charges?
Is the interest only mtg on the same rate as the rest? You should pay-off the highest interest rate loan first.
What is the current surrender value on your endowment policy?

david69_2

current value of endownment £16,693
no early payment charges
5.64% for the whole amount

david69_2

anybody care to respond or should i re-post on another board

Jonbvn

Sorry, but RL does get in the way sometime.

In your position, I would be looking to cash the endowment and pay-off the sum against the mortgage, then convert the interest only part of the mortgage to repayment. Problem is that this may require a remortgage, which may be difficult ATM.

Whatever you do, you must have a suitable method to pay-off the interest only part of the mortgage. Given this, paying down the interest only part of the mortgage seems like the best idea.

ansareal

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