Endowment Mortgages
Endowment mortgages are unusual products that combine a savings/ investment product with an element of life assurance.
Their use goes beyond mortgages and they are quite complicated. It is an interest-only mortgage whereby you pay interest on the full amount of the capital for the entire duration of the loan term.
The remainder of your monthly payment goes towards a premium for an endowment policy intended to repay the capital whilst a portion of this premium is invested.
There is not usually any absolute guarantee that your repayments will actually be enough to reach the level of your loan.
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