A
n endowment mortgage, also known as an interest-only mortgage, is a type of mortgage on a house in which you borrow money but only pay off the interest each month. In other types of mortgages, you will typically pay off both the loan and the interest.
The amount in an endowment mortgage
In other words, in an endowment mortgage, the amount that you owe will not decrease. This means that endowment mortgages are very difficult to pay off entirely, and are only a good option if you already make investments that have a rate of return that is higher than the interest on your mortgage, and if you are certain that your house is going to increase in value over time. Otherwise, you will likely remain in debt. It is a very risky option.
Mortgage providers
Sometimes mortgage providers will sell you an endowment mortgage by misleading you about the nature of the mortgage. If you were mis-sold an endowment mortgage in the past, you can file a complaint with the provider. If they did not explain the fees or charges, didn't assess your financial circumstances, or promised that the endowment was certain to pay off the mortgage, you may have grounds for complaint. There are time limits, so you should file a claim as soon as possible.
The bottom line
The bottom line is that regular repayment mortgages are a better option for the vast majority of buyers. In repayment mortgages, you borrow money to purchase a house, and you will pay more during each payment, but you are more likely to be able to pay off your debt in the long run.
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