Endowments - Where did it go wrong?

treliac

dunstonh wrote: »

Based on my experience though, the most common reason for someone to do an endowment was not future potential or worries about shortfalls but the fact that in most cases the monthly cost on an endowment mortgage was cheaper than a repayment mortgage. If also has to be said that the size of most shortfalls at maturity is not that great when you consider that the things that caused endowments to fall short have increased our wealth by far more in other areas (house prices for example).

Based on my experience and that of those I've discussed the subject with (limited experience of course but, I believe, typical) - the most common reason for someone to buy one was because they were told by a financial adviser (whether independent or tied) that it was the most efficient and sensible way of paying for their mortgage. Clearly, purchasers didn't anticipate that it wouldn't actually pay their mortgage at all.