Overpayment on Endowment or Repayment

A question about : Overpayment on Endowment or Repayment

We have a mortgage of Ј96,000,
Ј75,000 is on an endowment basis and
Ј21,000 is on a repayment basis.
Interest rate is 5.49% on both.
We have Ј7,000 to make an overpayment.
Can anyone advise whether it would be more efficient to pay off capital from the endowment or the repayment. Or does it not matter?

Best answers:

• Do you know how your Endowment Policy is performing?
  Is it on track to give you Ј75,000? If it is then put it to the repayment.
  But as you are not reducing your Endowment part you are always paying intrest on the total amount so logically it would make sense to make the overpayment on that.
  Hope that helps
• Should you surrender your endowment and use the money to convert all to repayment and cut the amount owed?
  Post some figs and we can check:
  Guaranteed sum assured
  Declared bonuses
  Surrender value (ring up and ask)
  Maturity date
  Monthly payment
• We are tied in with our current mortgage until January 2007, after then we intend to re-mortgage.
  The endowment part of our mortgage is as follows:-
  Basic sum assured Ј22,553
  Declared bonuses Ј11,220.50
  Surrender value (ring up and ask) Ј23,246.10
  Maturity date 3/7/2015
  Monthly payment Ј98.00
  Any help/advice would be gratefully received