Advice re mortgages please?

[fifitot]

I know little about how mortgages work tbh despite having one! I have a house worth about £150 thou but morgage is only £50. So £10000 equity BUT have a stupid endowment mortgage which have had for ever.

We want to move house but don't want our mortgage payments to rocket. At the same time given the poor state of our endowment policy (i.e unlikely to generate what it was originally projected as)it would make more sense to get a repayment. I think if we sold at £150 would mean £10000 to put against a new house. If that house was worth £20000 it would mean mortgage of £10000 - am I right?

In terms of borrowing that much it is really expensive because we haven't reduced the capital on current house due to having the endowment. Can we use the endowment to get another interest only mortgage or maybe part repayment?

I know I need to see a financial advisor but wondered if anyone could advise me here.

Yes, the new mtge would bee £100k.

And yes, the new mtge could be part repayment, part interest only with the endowment attached.

The fact that the "principal" on your current mortgage ie the amount you originally borrowed hasn't been significantly reduced won't make any difference. If you buy a place for 200k and have 100k deposit, means that your loan to value on the new mortgage is only 50% which makes you a very attractive proposition to lenders. That said you are doubling your debt so naturally your re-payments will go up. You should be able to get a great rate.

I think you do need to get some financial advice, as your endowment should still cover some of the difference between your equity and price of new house (£100k I think is what you're saying). If you don't want your mortgage repayments to go up more than they have to, you should get some advice on what your endowment is likely to pay out and just get a repayment mortgage to cover the difference, no?

Disclaimer is that I never fully understood endowments so I went for a repayment . I think you have to keep them until they mature or sell them on, don't you? So you'll be paying for it anyway...[wanders off aimlessly]

Thanks - really helpful comments.

Wish I hadn't bothered with an endowment either but at least got some compensation for being misold it! (Have spent it now though!!!!!)

That mis-selling thing always foxed me too .