Choosing A Mortgage Repayment Method

For most people the decision on how to repay a loan will between one of three options:

Repayment Mortgage

This is the traditional method of paying back a mortgage. Each month you pay a sum of money to your lender, which consists partly of repayment of your outstanding debt, plus interest on the mortgage amount that you owe...

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Endowment Mortgage

With an endowment mortgage the original loan remains outstanding for the full 25-year mortgage term. The money that would have been used to repay the capital would have been used to repay the capital is instead invested in an endowment policy. This money is used to buy stocks and shares. The hope is that in 25 years time the value of the endowment policy will have increased to a level where it can be used to repay the original loan and possibly provide a surplus cash amount...

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Pension Mortgage

Pension Mortgages are very tax efficient although they have disadvantages. Pension mortgages can only be funded from a personal pension policy. If at some future time you decide to become a member of a company pension scheme, you would have to cease making payments into your personal pension plan and make alternative arrangements to repay your mortgage...

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