type of mortgage

[homer75]

My daughter and her husband have a property which is worth around �130,000 and they have a mortgage for �60,000 on it. Their first two years are nearly up on a deal they got with the lender - they are presently on a capital repayment mortgage would an endowment type be a better idea ( as a long term savings plan incorporating life cover ) - they intend to try and pay chunks of it off over the next few years.

[buildersmate]

I reckon endowment-type mortgages are pretty much defunct these days. Wouldn't the best idea for them to have a capital repayment mortgage - you can still pay extra chunks off them. Just suggest they check the mortgage provider calculates the interest on daily basis - some only calculate on a monthly basis, meaning if you pay a chunk of extra capital on 3rd of a month, it doesn't get taken into account until 30th.

[homer75]

Thanks buildersmate - I'll pass that on to them.

[yummymummy]

Think about a One Account, you just have to leave money in it to reduce the borrowing term. Have a look at their Mortgage Shrinker to get an idea of how it would work for them. Not so good if they can't control their spending though! We've got one and it can turn into a bit of a challenge to see how much the balance has reduced each month!