Endowment mortgages

An endowment mortgage is a mortgage with an interest payment element coupled with a separate payment into an endowment investment product designed to repay the mortgage at the end of the term.

Money is invested in stocks and shares and designed to grow to the level required to pay of the mortgage at the end of the term. This type of mortgage has come in for some criticism over the last few decades because the nature of stock market investments means that the fund at the end of the endowment investment period is not always enough to cover the capital repayment required at the end of the term.

It is possible to cash-in or sell your endowment policy if it is not growing at the required level but you may not get back the amount of the original investment.

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