How does it work?

You make two payments per month. One to the lender to repay the interest on the amount borrowed, the other to an insurance company for an endowment contract. There are mainly two types of endowment: unit linked or with profits. Both invest in a broad range of assets including stocks and shares. The capital in the endowment aims to build up over the term of the mortgage to repay the outstanding capital, although to achieve this the investment performance needs to be sufficient to build up the required capital and this performance cannot be guaranteed.

ADVANTAGES:

1. This one's very flexible.
2. You can take the endowment policy with you if you move home or change mortgage lender.
3. Endowments usually include some kind of life cover and some also include critical illness cover.
4. If the endowment contract performs well, you may accumulate more funds than required to repay the loan.

DISADVANTAGES:

1. Endowments are not risk free as there is investment in the stock market.
2. There is a possibility your fund may not have built up sufficiently to repay the capital.
3. You must keep a watchful eye on your fund's performance to help prevent this happening.

Levels and bases of and reliefs from taxation are subject to change and their value depends on the individual circumstances of the investor.

The value of investments and the income from them may go down. you may not get back the original amount invested.

Your home may be repossessed if you do not keep up repayments on your mortgage.

As Independent Mortgage advisers we always offer the option to pay for our services either via fees or commission. Where the commission option is chosen you will not be asked to pay any fee to us unless the best lender is one of the few who do not offer introducer fees to brokers. In such circumstances where the lack of broker commission results in your having to pay a fee - or where you choose to do so to help reduce your overall mortgage costs - we typically charge 0.35% of the loan amount. On a loan of £100,000 this would mean that you may be charged a fee of £350. A minimum fee of £250 will apply. Fees become due upon completion but will be chargeable, and thus invoicable, upon receipt of an offer. You will receive written confirmation of any such chargeable fee before proceeding.