Monthly payments to the lender consist of interest only and the outstanding mortgage remains the same. You make payments to a separate investment with the aim of producing enough capital to repay the mortgage in full at the end of the term. There are a number of different investments that can be used. You can also use a combination of them. Advantages Regular reviews are carried out on many plans to ensure they will pay off the mortgage at the end of the term. If the underlying performance has been less than assumed, you may need to increase the contribution. However, if the growth on the fund is better than assumed you could receive a lump sum over and above the mortgage amount, or pay off the mortgage early. Life cover is automatically included in the plan. You may also be able to include critical illness protection and waiver of premium benefit. Disadvantages If you stop the endowment early you may get back less than you invested. Endowments are only suitable to repay long-term mortgages, e.g. at least 15 years. Endowments invest in the stock market and are not suitable for risk averse borrowers. . Click here now to find out how we can help you through the mortgage mine field to the best deal for YOU!
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Your home may be repossessed if you do not keep up repayments on your mortgage.