Endowment shortfalls
This content applies to Scotland only.
Housing laws vary between Scotland and England. Get advice relating to England
If you have an interest only mortgage and have been told that your endowment policy may not cover the outstanding capital at the end of your mortgage term, you may be able to make a complaint and get compensation. If this isn't successful, you can take steps to ensure your mortgage will be paid off.
How shortfalls develop
An 'endowment mortgage' is not actually a mortgage at all, it's a combination of an interest-only mortgage and an endowment policy, an investment which is designed to produce enough money to pay off the capital sum of the mortgage.
Catching up
If your endowment policy is not likely to repay the whole of your mortgage, the insurance company that provided it should write to you to warn you that this is the case. There are a number of options that can help you catch up on the shortfall.
Endowment complaints
If you have been told that your endowment policy may not cover the outstanding capital at the end of your mortgage, you should get advice to see whether you can make a complaint and get compensation.
