Endowment mortgages

Endowment mortgages are interest only. Monthly interest payments are made to the lender as well as monthly endowment policy payments.

The idea is that an endowment policy over the whole term of your mortgage will generate enough funds to pay off the mortgage and hopefully generate some profit.

But of course the risk is that the investment will not raise enough money and there will be a shortfall and you will have to make increased payments at the end of your mortgage term. Falling interest rates in recent years have seen endowment mortgages fall out of favour and although rates are on the rise again, many shortfalls are still predicted.

However, there are steps you can take to remedy the situation if this is the case.

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