How can I pay off my mortgage quicker without cashing in my endowment?

Posted on 23 July 2007

I owe approx £50,000 on a part repayment, part interest only mortgage. £20,000 of this is interest only. I also have an endowment policy which should cover the £20,000. At the moment the whole plan has 13 years remaining, but I have disposable income and would like to pay off the mortgage quicker. The only problem is the interest only part, where the endowment policy will not mature for 13 years. How can I pay off my mortgage quicker without having to cash in the endowment policy early?

Stuart


Hi Stuart,
 
The good news is that your mortgage and endowment are totally separate entities which mean that you can pay off the interest only part of the mortgage by any method you wish.
 
If you do overpay your mortgage, the lender normally assumes that you want to pay off the repayment part, but if you keep going to the point where you pay off the interest only part as well, then any money that does come out of the endowment when it matures is just cash for you.  Even if your endowment is 'assigned' to the lender (if you have had that mortgage for a very long time) they will take whatever you owe them and give you the change.

Katie

Categories: Lower mortgage payments

 

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