Endowment Mortgage

milliesnan

We have an endowment mortgage that is due to mature this November - I have tried to make a claim as the forecast is about two thirds of the amount needed to pay it off. We were definitely told that the mortgage would mature with probably double the amount and we would have a large lump sum to retire on. I have written so many letters and also complained to the Financial Ombudsman - only to be told in the end that as we purchased our Endowment before the law came out that it was illegal, we cannot claim anything. The Ombudsman's rep who phoned me said it wasn't worth following up because there is no-one to help us. Cannot believe that after 25 years of paying - the Endowment we have paid regularly has made just over £300 more than we have paid in premiums! This is leaving us about £8000 - £10,000 short on a £30,000 mortgage - we haven't got any money and are both retired. It seems as if our kids will have to pay it off after we are gone. Of course, if one of us pops off before November - it will be paid!!!

dunstonh

only to be told in the end that as we purchased our Endowment before the law came out that it was illegal

Its not illegal.

Regulation came into force in 1988. Any cases sold prior to that time did not have to comply with rules which didnt exist at that time.

The Ombudsman's rep who phoned me said it wasn't worth following up because there is no-one to help us.

Which is true.

This is leaving us about £8000 - £10,000 short on a £30,000 mortgage - we haven't got any money and are both retired.

So, for the last 10 years when you knew it was going to fall short and your mortgage rates were so much lower than they were in the 90s, what did you do with the money you saved?

A £10,000 shortfall only required £64.52pm to be put aside over 10 years. The noughties mortgage rates were much lower than the 90s so you could afford to save that amount if you wanted to. What did you do with the savings?

It seems as if our kids will have to pay it off after we are gone. Of course, if one of us pops off before November - it will be paid!!!

So, when the bank ask for the money bank in November, what are you going to do when you cant pay it?

BillTrac

We changed from a repayment mortage to an endowment when we moved house in 1987. Everything was rosy. Mortgage would be paid off and a nice little bonus on top.

In 2000 we received a letter to say that the endowment to mature in 2012 would have a shortfall. Bearing in mind the original endowment was for £24k (oh the good old days of house buying) and a projected bonus of £18-20k suddenly became a shortfall of £8k with nil bonus! We also fell foul of the pre-1988 ruling.

But instead of taking the BS idea of pumping more money into the endowment we remortgaged, keeping the endowment policy running. Went back to a 5-year fixed repayment, (twice) and will finish paying the mortgage next year and we have just had a letter confirming the guaranteed minimum we should receive from the endowment will be £14500.

Some people I know put their head in the sand, possibly that is what you did and now it has come back to bite you. You really need to get things in order now, or November will be here and the BS will want their money

good luck, you might need it.