Free advice line 0800 014 7863
A pension plan mortgage is another mortgage plan linked with investments. This mortgage allows you to pay the lender the interest and owe the capital borrowed at the end of the term. The capital is paid through any private or corporate pensions you will be entitled to on retirement. A pension plan mortgage is tax efficient but not flexible. Also with this investment based mortgage there are risks. More...
Consider the following:
Q. Is my pension enough to pay a mortgage and live off for the rest of my life?
Q. How will I pay the mortgage if I become unemployed before retirement?
Q. I cannot claim my pension until I’m at least 50, can my mortgage wait?
The answers should provide a clear indication as to whether a pension plan mortgage will cater for your needs.
An endowment mortgage is a loan and investment. Your monthly payments include an interest payment to the lender and a payment to an endowment policy.
The customer pays only the interest on the capital borrowed and instead makes payments to an endowment policy. The objective being money paid into the endowment investment policy will repay the mortgage at the end of term and in an ideal situation, still leave a lump sum. However, due to the nature of investment, there is the risk of a shortfall on an endowment mortgage policy – a common endowment mortgage problem.
It may serve you to trade your endowment mortgage policy if your investment programme is not showing significant levels of increase.
Return to Debts homepage.
