Hello. I will try to give as many details as possible, hope you can help, really I am looking for a second opinion on whether to cash in an endowment.
Currently have an interest only mortgage with Santander, with a Friends Life With Profits Fund Endowment. House purchased 1999. Mortgage is £125k, house worth £350k.
Fixed rate 2.99%with Santander ends in March, they will put us on their SVR- our payments will go up from £313.32 to £499 a month.
Endowment is £249.21 a month. Currently on a green light. Guaranteed maturity value £7589.00. Cash in value £47542.31.(value of units £40197.68, terminal bonus £6359.79, reorganization bonus £984.84) Assumed growth rate 4% projected maturity value £122000.00. At 8% it would be £184000.00.
I have an offer from NatWest to go onto a repayment mortgage. 18 years £125k on 3.59% 5 year fixed. £786 per month. I'm worried that this would be very tight if I carry on paying the endowment as well. I am self employed.
I could cash in the endowment and have a £77k mortgage, paying £487 a month over 18 years, and hopefully overpaying by £200 a month. I am very tempted by this, as my partner has just lost his business and has been left with a lot of debt as he guaranteed the company overdraft. Grrr. Thus the mortgage will be in my sole name as his credit rating is totally trashed. Maybe he should have thought of this before he guarenteed the loans...
The other option is to stay with Santander and pay the SVR, as they will only reduce the rate if we go on a repayment, and they have been rather sketchy about what they would actually reduce the rate to!
Anyway, I was told that we have an excellent endowment and I really shouldn't let go of it. However, as my financial future looks a bit unsure I don't know what to do. I could probably afford a part repayment, but I guess I would have to go to a broker for that?
I know that no-one can tell what endowments will do in the future, but I just wondered if someone could give me their opinion on whether it looks like a good one as I was told.
Thanks, and sorry for the novel.
Currently have an interest only mortgage with Santander, with a Friends Life With Profits Fund Endowment. House purchased 1999. Mortgage is £125k, house worth £350k.
Fixed rate 2.99%with Santander ends in March, they will put us on their SVR- our payments will go up from £313.32 to £499 a month.
Endowment is £249.21 a month. Currently on a green light. Guaranteed maturity value £7589.00. Cash in value £47542.31.(value of units £40197.68, terminal bonus £6359.79, reorganization bonus £984.84) Assumed growth rate 4% projected maturity value £122000.00. At 8% it would be £184000.00.
I have an offer from NatWest to go onto a repayment mortgage. 18 years £125k on 3.59% 5 year fixed. £786 per month. I'm worried that this would be very tight if I carry on paying the endowment as well. I am self employed.
I could cash in the endowment and have a £77k mortgage, paying £487 a month over 18 years, and hopefully overpaying by £200 a month. I am very tempted by this, as my partner has just lost his business and has been left with a lot of debt as he guaranteed the company overdraft. Grrr. Thus the mortgage will be in my sole name as his credit rating is totally trashed. Maybe he should have thought of this before he guarenteed the loans...
The other option is to stay with Santander and pay the SVR, as they will only reduce the rate if we go on a repayment, and they have been rather sketchy about what they would actually reduce the rate to!
Anyway, I was told that we have an excellent endowment and I really shouldn't let go of it. However, as my financial future looks a bit unsure I don't know what to do. I could probably afford a part repayment, but I guess I would have to go to a broker for that?
I know that no-one can tell what endowments will do in the future, but I just wondered if someone could give me their opinion on whether it looks like a good one as I was told.
Thanks, and sorry for the novel.