Endowment

Beat an endowment shortfall

Poorly performing endowment mortgages are causing an enormous amount of worry in the housing market.

Borrowers pay a set amount into a policy each month in the hope that it will produce enough to clear their loans in full after 25 years. But millions have now been told that bad investment performance means the endowment is unlikely to clear more than half the value of the mortgage at this point. So what can borrowers do?

As already shown, a remortgage can dramatically cut your monthly outgoings. So if you are worried about your endowment you can remortgage and use the money you save each month to chip away at the capital you owe. By bringing your mortgage down to size it may still be possible to clear it in full when your endowment finally matures. Or invest your monthly savings elsewhere to produce a second lump sum of money that will make up any shortfall and can clear your mortgage when your endowment matures.