An endowment mortgage was popular some years ago, but they are less common and less popular with borrowers today.

In its most simple form, an endowment policy is an insurance contract where, in exchange for regular premiums, a lump sum will be paid to you at the end of an agreed term.

The money is invested on your behalf but, as with all investments that are exposed to potential for growth, there’s the risk that the ‘pot of money’ could reduce in value over the term as well as the potential to increase.

If you have an endowment policy in place, and are relying on it to help repay all or part of your mortgage at some point in the future, it is always a good idea to check its performance regularly. This way, if you’re made aware there’s a shortfall in its projected performance, you have an opportunity to make other arrangements. An independent financial adviser (IFA) is the best person to talk to, if you have any questions about endowment policies.

Questions you might like to ask your IFA…

If my endowment policy’s not performing well, what should I do?

Can I ‘cash in’ my endowment, and access what I’ve invested so far?

Are there alternatives to endowment policies?