My endowment policy has performed crap but it's currently worth just about enough to cover my outstanding mortgage

Do you think it will make more money than the mortgage interest you are paying?

How much is the life cover worth? Is it just enough to pay the mortgage off?

I would probably cash it in and pay off the mortgage.

Check they haven't applied a 'Market Value Reduction' first - i.e. get a current surrender valuation. You may find it isn't worth as much as you think from the last statement. I have two in that situation and it's touch and go whether to take the loss now or keep paying the premiums and wait for things to improve...

Million dollar question - I don't know and thats what i'm wondering

It's currently worth about half of the original mortgage/and so half their predicted target :o)

My gamble is whether to use the little it's currently worth to clear the little i still owe - or whether to stick it out and see whether it reaches the predicted price (double what it is now) by which time i will have paid off the mortgage and it all goes in my sky rocket :o)

Insurance just covers the mortgage which wont be there if i cash it in and pay it off

I understand an 'early redemption fee/penalty'

I dont understand the term 'Market Value Reduction'

I'm just investing money with them (just like any bank) = my house value is merely a target for them to achieve, it's got nowt to do with them what my house is actually worth (no more than my personal savings account)

Maybe the phrase does not best describe it

Look at it another way.

If you owned your house outright with no mortgage on it, would you remortgage it and put the money into this endowment policy?

"Market Value Reduction" has nothing to do with the market value of your house, but with the value of the investments.

As others have said, it's to do with the market value of the investments behind the ewndowment, not of your house.

Basically the pot behind all the endowments is not currently big enough to cover what they are all currently 'worth', so if you were to take out the nominal value of your policy you wouod actually be reducing the investment pot by more than your 'fair share'.

Market Value Reduction is what they wrote into the rules when you took the policy out to safeguard themselves in this situation. Instead of getting what you think you should be, you get your 'fair share' of the pot instead.

For a smaller policy I have, that's £2900 instead of £3400 if I take it out now.