Endowment loans are a type of mortgage that comprises of two parts. The first part is an interest-only mortgage loan that works like any other mortgage of this type. However, combined with this is an endowment policy that you set up and mature in order to pay off the mortgage at the end of the loan term. The policy is set up to grow enough to pay off the amount you borrow.

An endowment Mortgage loan has very low monthly payments, like an interest-only loan. You are investing in a savings policy that will pay off your mortgage loan. This means you are saving on your monthly payments as well as spending your money wisely by investing in a policy to pay off your mortgage. This can reduce the cost of your mortgage loan whilst still keeping your payments low.


Although the interest-only loan will reduce your monthly payments, paying off only the interest means you are paying money without reducing your debt in any way. And you are still paying money into an investment fund so your monthly payments are more than just the interest. Also, the investment fund is designed to pay off the mortgage loan in full, but this is by no means guaranteed. Many people are finding themselves in a situation where there is a shortfall in the policy and they are unable to pay off the mortgage in full.

If you have an endowment policy, you should have received regular letters over the last few years telling you whether your policy is on track to repay your mortgage. These are called re-projection letters. They tell you whether your policy is still on track to pay out the amount needed to repay your mortgage at the end of the term; the amount of projected shortfall, if any; the options open to you; and what further action you need to take.


If you have not received a re-projection letter, contact your policy provider and ask for one. If you have received a re-projection letter, make sure you read it and take action if you need to. If there is a high or significant risk that your policy is not on track to repay your mortgage, you will need to take suitable action. If you think you may have grounds for complaint you should act now as time may be running out. If you can not resolve something by discussing it with the firm, you can usually make a complaint. You can also get help to make your complaint if you need it.

You can usually make a complaint by phone, by letter or face to face. Try to have all the information you need before you start. If you are not happy with the firm’s reply to your complaint there are free independent complaints schemes that can help you come to an agreement. In some cases you may have to go to court to get the matter resolved to your satisfaction.