Endowment Mortgage

With an Endowment Mortgage, part of your monthly repayment goes towards paying off the interest on your mortgage. The rest is invested long term, the idea being that your investment will provide a good enough return to pay off the mortgage principal at the end of the repayment term.

If the investment returns more than the mortgage amount, you will both pay off the debt and receive a cash sum. If the investment performs poorly, you may have an endowment shortfall and be unable to fully pay off your mortgage.

Endowments have gained a bad reputation, as in the past many people were pressured into opting for them over a capital repayment mortgage, with the risks not properly explained, and with the investments badly chosen.

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