Endowment mortgage shortfall expected

Some 86 per cent of homeowners holding endowment mortgages have been warned to expect a shortfall in their policies, solicitors and independent financial advisors have warned.

People in Northern Ireland who have taken out endowment policies had originally believed that investments would pay off their mortgage and had the potential to provide surplus cash.

But research from Fairinvestment.co.uk has revealed that 41 per cent of those expecting a shortfall are expecting to be up to 25 per cent below their target mortgage amount.

In addition, some 23 per cent told the survey that they were expecting to need to find an extra 50 per cent of the value of their debt in order to cover their mortgage value.

Sharon Bratley, chartered financial planner for Fairinvestment.co.uk, said that endowment policies are a "letdown" and advised the 700,000 who have not yet remortgaged to seek advice.

Endowment mortgages are policies allowing homeowners to pay an interest-only mortgage, accompanied by a savings plan which is expected to pay off the remainder of the debt.


www.wilson-nesbitt.com/services/property_residential