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By using an endowment or pension to repay your
mortgage, you pay an amount, usually monthly, to
a life assurance company, which buys a policy to repay your loan
at the end of the mortgage term. Depending on how well your policy
has performed there could be a cash surplus available for you after
your mortgage has been repaid. On the other hand if it has under
performed, it may not provide enough and you will have to make up
the difference yourself.
With endowment mortgages it is important therefore
to ensure that regular checks are carried out to make sure the policy
is performing well enough to generate sufficient money to repay
the mortgage at the end of the agreed term.
An endowment policy includes life cover to repay
your mortgage in the event of your death prior to the end of the
mortgage term.
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