Glossary - Endowment Mortgages

Endowment Mortgage is a Mortgage with part of the repayments invested.
An endowment mortgage is based on a savings mortgage package. Some of the consumer’s repayments can be used to pay off the interest on a mortgage loan while the rest is invested by the lender.

Example: Endowment Mortgage Repayments
Endowment mortgages were made to allow borrowers to pay smaller monthly premiums. At the end of the policy the amount that was invested should then be enough to pay off the remaining balance in full. Lenders have been doing all they can to make sure that at the end of the mortgage term, the invested money will have made enough to pay off the outstanding mortgage balance, but unfortunately in alot of cases this has not been the case.

Useful Tip
Current Endowment Policy Holders have been told that their final amount of invested money is unlikely to cover the final balance of their mortgage. If the invested amount does not make enough to pay the total outstanding mortgage, then the borrower will have to find the money to pay it off themselves.
If consumers are looking for an endowment mortgage they are advised to look into all terms and conditions and to make themselves aware of the market conditions.

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