Endowment Complaints

What effect will the current credit crunch have on my endowment mortgage?

My endowment mortgage of 25 years has about 2 years left to run. What effect will the current credit crunch have on it?

Public Comments

1. endowment mortgage; never heard of that. It would seem to me that an endowment and a mortgage are antonyms.
2. The credit crunch will have little effect on it other than the growth of the endowment could be stunted due to the drop in the stock market. Most endowments are stock-market linked I would guess so you may end up with a short-fall depending on how your endowment has been doing up to now... The main effects of the credit crunch are going to be on new mortgages and in particular how difficult it is going to be to actually get one. If you are close to paying off your mortgage and your endowment is going to more or less cover the mortgage then you have no problems. However many endowments actually fail to reach their target and in that case you may be forced to re-mortgage if you cannot cover the short-fall yourself. No doubt you won't have to worry about negative equity if you are that close to the end of your mortgage. http://www.thecreditcruncher.com/2008/09/house-prices-to-fall-by-25.html You should not have too much trouble securing a short-term mortgage for what you are likely to need, but the mortgage companies have taken advantage of the situation and have hiked up their prices - you will find it very difficult to get a mortgage without spending at least £1000 in fees at the moment. There is no justification for this price rise, they should be tightening up on who they lend money to, but what they have done is just make it more expensive to borrow - we, the paying customers are paying for the mistakes the banks made by investing in bed debts...