Split Loan - Part Repayment, Part Interest Only

 

Mr K Matthews

                       

23rd April 2010

 

Dear Sir / Madam,

 

Based on the advice from my financial advisor, I took out an endowment policy to support my mortgage. The advisor strongly recommended that I take an endowment mortgage over my choice of repayment.  I did and still do consider that I was given bad advice.

 

Since taking out my endowment policy my plan was reviewed and I was informed that it was only expected to produce £41,800, based on current figures.  I therefore kept the £41,800 on the interest only method with the additional loan amount to be altered to the repayment method. This change took effect from the 1st July 2000.  Standard MIRAS applied throughout my mortgage term, the details are as follows:

 

 

Loan Halifax

£45,000

Completion date

21st March 1992

Term

25 years

First payment made

1st April 1992

Endowment premium

£63.92 from 21/03/1992 for 25 years

Surrender value 23rd April 2010

£21,100

Capped rate

9.95% 21/03/1992 for 5 yrs

Discount

1.5% from 20th April 99 for 2 yrs

                       

I look forward to receiving your reply, advising me of how to take this forward.

 

Yours faithfully

 

Mr K Matthews

 

Some research via the endowment supplier and lenders verify the details are correct. The decreasing term assurance payment would have been £10.20 from 21/03/1992 for 25 years.

 

NB To produce the calculation you will need to input the change calc type adjustment (this enables you to alter part of the loan to the repayment method) however, before doing this you must also set up a Set variable loan A balance adjustment.  This is to allow the system to identify the two elements of the loan.

Related Topics

Endowment Cases
Initial Entry Screen
Main Adjustment Set
Endowment Adjustment Set
Repayment Adjustment Set
Main Screen
Comparison Screen