What is an Endowment Mortgage

The loan will be treated in the same way as a Repayment Mortgage, except for the repayment of the principle amount borrowed.  An endowment life assurance policy is on the life of the borrower is taken out to repay the principle at the end of the loan period.  An endowment policy is a life assurance policy which will pay out a sum of money on a fixed date. (in this case the end of the loan) or on death of the borrower, whichever occurs earlier.  Assuming the borrower remains alive, which is hopefully the case, he or she will make monthly payments, normally one amount, which cover the interest on the loan and premiums to the Life Assurance company.  These mortgages proved popular because the insurance policy often paid an added bonus when the loan was repaid (say after 25 years) which was of course and extra benefit for the borrower.  The bonus came out of the profits of the insurance company.  Endowments however recently have become a thing of the past, as many insurance companies struggled with the investments and bonus levels dropped.  Many people struggled to pay off their original loan values, let alone getting a bonus.