hen we hear the term –“endowment mortgage”.

The main differences are:

There are no guarantees. The basic sum assured is less than the capital sum borrowed normally one third of the mortgage loan. It relies on performance of the investment to produce yearly bonuses. Then, usually, a terminal

The Full Endowment Mortgage

This is the original interest only scheme which was first introduced in the 1960s. It offers a guarantee that the mortgage loan will be paid off in the event of the death of the borrower, first death if the mortgage is in joint names, or survival to a pre-agreed date. This date will usually be 25 years hence. The borrower pays interest only on the capital balance, (the actual capital, or loan, remains the same,) and takes out a ‘with profits’ endowment life assurance policy. The monthly premiums for this are set at the outset and remain the same until redemption of the mortgage. At maturity of the policy, a tax free sum made up of accumulated bonuses over the years and often a terminal bonus will be paid. Out of this the capital sum (the original amount borrowed) will be repaid. In the past, many full endowment products have achieved, on maturity, more than the value of the outstanding mortgage, giving a tax free surplus. Because this particular policy provides guarantees, it is expensive and often beyond the means of most borrowers.

The Low Cost Endowment Mortgage

This is a variation of the full endowment mortgage and is the one we generally think of when we hear the term –“endowment mortgage”.

The main differences are:

There are no guarantees. The basic sum assured is less than the capital sum borrowed normally one third of the mortgage loan. It relies on performance of the investment to produce yearly bonuses. Then, usually, a terminal b

his date will usually be 25 years hence. The borrower pays interest only on the capital balance, (the actual capital, or loan, remains the same,) and takes out a ‘with profits’ endowment life assurance policy. The monthly premiums for this are set at the outset and remain the same until redemption of the mortgage. At maturity of the policy, a tax free sum made up of accumulated bonuses over the years and often a terminal bonus will be paid. Out of this the capital sum (the original amount borrowed) will be repaid. In the past, many full endowment products have achieved, on maturity, more than the value of the outstanding mortgage, giving a tax free surplus. Because this particular policy provides guarantees, it is expensive and often beyond the means of most borrowers.

The Low Cost Endowment Mortgage

This is a variation of the full endowment mortgage and is the one we generally think of when we hear the term –“endowment mortgage”.

The main differences are:

There are no guarantees. The basic sum assured is less than the capital sum borrowed normally one third of the mortgage loan. It relies on performance of the investment to produce yearly bonuses. Then, usually, a terminal

e mortgage. At maturity of the policy, a tax free sum made up of accumulated bonuses over the years and often a terminal bonus will be paid. Out of this the capital sum (the original amount borrowed) will be repaid. In the past, many full endowment products have achieved, on maturity, more than the value of the outstanding mortgage, giving a tax free surplus. Because this particular policy provides guarantees, it is expensive and often beyond the means of most borrowers.

The Low Cost Endowment Mortgage

This is a variation of the full endowment mortgage and is the one we generally think of when we hear the term –“endowment mortgage”.

The main differences are:

There are no guarantees. The basic sum assured is less than the capital sum borrowed normally one third of the mortgage loan. It relies on performance of the investment to produce yearly bonuses. Then, usually, a terminal

of the outstanding mortgage, giving a tax free surplus. Because this particular policy provides guarantees, it is expensive and often beyond the means of most borrowers.

The Low Cost Endowment Mortgage

This is a variation of the full endowment mortgage and is the one we generally think of when we hear the term –“endowment mortgage”.

The main differences are:

There are no guarantees. The basic sum assured is less than the capital sum borrowed normally one third of the mortgage loan. It relies on performance of the investment to produce yearly bonuses. Then, usually, a terminal

hen we hear the term –“endowment mortgage”.

The main differences are:

There are no guarantees. The basic sum assured is less than the capital sum borrowed normally one third of the mortgage loan. It relies on performance of the investment to produce yearly bonuses. Then, usually, a terminal bonus in the last year to achieve the required tax free sum at maturity to pay off the debt. There is an inbuilt life cover so that in the event of death the full loan is paid off but, if the borrower survives to the end of term date, there is no guarantee that the final value will be sufficient to repay the loan outstanding. Because of the lack of guarantee the premiums are more affordable and this particular type of mortgage was very popular for this reason until recent times. Then, some insurers were forced to admit there may be a shortfall in maturity values due to underperformance of the investments made and borrowers were notified accordingly.