mega_stream

We've got an endowment running at the moment, been going 5 years.

We moved to a bigger house 4 years ago, hence have a top up aswell.

We want to change to a repayment, we were planning on treating the endowment's as being paid up and just leave them till the term finishes. I've been told as we took them both out after 1988 that we can't treat them as paid and only have the option of keeping them running (continuing to pay into them) or to cash them.

Is this true?, can we not treat them as being paid up?

I never trust anyone that works on commission so hopefully can get some good advice on here

Thanks

I assume changing to a repayment is the best thing to do?

stevem2k

Dunno if it helps, but I have just changed our 78k interest only + 105 repayment to a 50k interest only + 130k repayment, leaving the policy running.

This gives me some leeway so that if/when the policies start making money again we will reap some of the benefits, while allowing a worst case scenario of it drastically underpaying, but still being enough to pay off the capital.

Works for me at the moment, but I will reasess on a bi-yearly basis I think....

It's also worth looking at what you are currently paying for life assurance / critical illness etc. I halved what we pay for a better standard of cover, simply by spending some time getting quotes off the net.


Steve

fast bloke

'I assume changing to a repayment is the best thing to do'

If anyone tells you this is the case ask them if I can buy their crystal ball.

Without knowing how your endowment will perform over the next 20 years there is no way to give a correct answer. A repayment is certainly the only way to guarantee your mortgage will be paid off in 20 years. It is still a possibility that your endowment will pay your mortgage and leave enough for a Ferrari in 20 years...

If you can carry a bit of risk, Steve's solution is probably the one that gives you most flexibility. By reviewing every two years you are able to match the amount of capital outstanding to the projected value. As the year progress the projected value will become more accurate.

MattW

Good advice from fb (as usual)

My mortgage is part repayment(70k) part endowment(24k). The endowment part is my wife's original mortgage from before we were married, but we pay enough to cover 94k on repayment. the endowment will be a nice bonus in 21 years time.

It is true that endowments have suffered in the last few years, and punters have been asked to contribute more. However, this is where plans are close to paying out. There is no magic ball to guage how your endowment will perform. The flip side is that life companies now have reduced the %age growth rate that they use to indicate performance, this is as a reult of FSA action.

I'm not an adviser, but work for a life coy so do have an interest in these sort of things. Personally i like the fact that my mortgage is guaranteed to be paid off after 25 years, so will always go for pepay. Also its nice to see the figure reducing on my mortgage statement.

Tiggs

"I never trust anyone that works on commission" what? like a professional within the industry?

"so hopefully can get some good advice on here" on what? neons on dump valves?

if you dont like commision find a fee based adviser (as a guide we are £150ph) to look at it.

T

south-star

Tiggs,your defence of the financial services industry is admirable,and no-one doubts your professioalism and integrity,but surely you can understand our sceptisism.

Sadly most of it comes not from hearsay,but from unfortunate personal experience.

mega_stream

Well said that SS, I was just gonna reply to that

Do us IT bods give you clever money blokes a hard time when you ask how to change your screensaver

lol

Thanks for the other replies so far, I'll look into splitting between the two.

fast bloke

Does that include the name calling when you hang up the phone (Don't forget - I used to be an IT bod)

BTW - Nearly everyone in financial services will get comission of some description. Just cos someone charges you £500 up front doesn't mean they won't get an additional commision payment

Tiggs

sorry....screensaver?????