Jump to main content of pageaccessibility informationSitemap
21 Apr 2018

Mortgage Advice

Colleys

Hometrack House Price Comparison
Energy helpline Utility Switch
rightmove.co.uk
Build Store

  1. Repayment Mortgages
  2. Interest Only Mortgages
  3. ISA Mortgages
  4. Endowment Mortgages
  5. Pension Mortgages

Specialist UK Mortgages...

  1. Bad Credit
  2. 95 % Mortgages
  3. 100 Percent
  4. Professional
  5. Graduate
  6. Lifetime
  7. Btl Mortgages
  8. Portfolio Mortgages
  9. Let to buy
  10. Self build
  11. Council right to buy
  12. Shared ownership
  13. Mortgage Protection
  14. Mortgage Surveys
  15. Mortgage Info
  16. Home Information Pack

Endowment Mortgages Explained

Endowment Mortgages

UK Endowment mortgages are effectively an interest only mortgage with an additional savings plan in the form of an endowment policy.

Monthly contributions are made to a Life Insurance Company who invest your money in the savings plan,known as an endowment. Life insurance is built in to the endowment plan so your mortgage is repaid if you die before the endowment policy reaches maturity.

Endowment policies typically take two forms; 'with-profits' and 'unit-linked'.

With Profits Endowment


A 'with profits endowment' has two bonuses; a reversionary bonus and a terminal bonus. The reversionary bonus is paid each year and is guaranteed if the policy is maintained until its maturity date. The terminal bonus is paid on maturity of the policy and is dependant on the performance of the underlying fund.

Unit Linked Endowment


The value of a unit-linked policy is determined by the value of the underlying investment at the maturity date. It is important to remember that the value of units on a unit-linked policy can go down as well as up.

Pros and Cons of Endowment mortgages

Advantages

  • If the investment growth rate exceeds those estimated at outset you may be able to pay off your mortgage early or enjoy a lump sum at the end of the repayment period, in addition to paying off your mortgage.
  • The life insurance cover can be cheaper than if purchased on its own.
  • The mortgage can be transferred to another property.

 

Disadvantages

  • Endowment plan charges are relatively high.
  • You have no guarantee that you will have sufficient funds to pay off the mortgage at the end of the repayment period, as the investment could perform below that assumed at the start. (By monitoring your investment's performance you could make additional contributions during the repayment period if you felt the fund was under performing.)
  • Endowment plans are less flexible than other types of investments, with most plans not allowing you to stop and start premiums. Some plans charge penalties if you stop paying premiums.

Do you want fee free Endowment mortgage advice?

For Endowment mortgage or remortgage advise please feel free to contact us for independent mortgage advice from a professional endowment mortgage advisor.

You may also be interested in:

We normally do not charge a fee for mortgage advice, however this is dependent on your circumstances. Our typical fee would be £500

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

Think carefully before securing other debts against your home, your home may be repossessed if you do not keep up repayments on your mortgage.

Go Direct.co.uk is a trading style for website purposes of Go Direct UK Ltd.

Go Financial Services is a trading style of Go Direct UK Ltd which is an appointed representative of Personal Touch Financial Services Ltd which is authorised and regulated by the Financial Conduct Authority. Registered in England & Wales Company 5703224. FCA Number 456600

We normally do not charge a fee for mortgage advice, however this is dependent on your circumstances. Our typical fee would be £500

Home | Mortgage Calculator | Best Mortgage Deals | Life Insurance Quotes | Mortgage Advice
Personal Finance | Mortgage Life Insurance