Surrender or keep endowment Puddlesplasher

#1
Hi, I keep going round in circles and can't decide upon the best course of action. We are currently remortgaging as at the end of our current deal. We are also looking to raise funds for some home improvements.



Our options are to remortgage for £185500 on a five year fixed rate rate of 2.68% on a repayment mortgage. Or we could reduce our mortgage to £165000 (also on 2.68%) and surrender our endowment to pay for the home improvements.



We hold an Aviva with profits endowment which was taken out in June 1999 and is due to mature in June 2024. The current surrender value is £30378. The MEP is £5040. We would redirect the current premium of £127.01 a month into overpaying the mortgage by that amount each month. We have adequate life cover so wouldn't need to extend that.



If anyone is able to offer any guidance as to what the best course of action may be I'd be very grateful.

#2
Might be a bit too late - I see it's more than a month since you posted.

All depends on your personal circumstances really, but if you cash in you will not get the MEP of £5040 that you mention. Early surrender = no MEP, it is only paid out on maturity.

I have a Standard Life policy that I have been hanging onto for years as it has a MEP worth about £5k. This year is pay-dirt for me - it matures in April.

If you can wait another 8 years for maturity, you'll probably be happy!

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