For those with endowment mortgages that have been paid off, the question remains as to what they should do with them. While some immediately think of selling their endowment mortgage, this may not be the best solution according to some experts. While it is certainly fine to sell your endowment mortgage, there are other options that may offer more security to homeowners.”It is possible to sell your endowment policy. In many cases, selling endowment policies can return more money than the amount offered by the life assurance company. The difference can be up to 35 per cent more, but the age of the policy, the type of policy (must be With Profits) and the life company that issued it, play a big part in determining its secondhand value. You must also be aware that an endowment policy carries with it some useful life cover before you decide what to do with it,” said David Garfoth with the Money Matters Newsletter. ”If you encash it because you want to spend it, then fair enough, but if you encashed it and simply placed the money on deposit, would the rate of interest you receive beat the potential rate of return on the policy? If alternatively, you re-invested the money you would suffer setting up charges and costs (commissions etc), so would that really be a good idea?” he continued.
Related reading: Endowment Mortgage
Comment on this article