FAQ's

Q: What is an endowment mortgage shortfall?

An endowment shortfall occurs when your endowment policy is not going to be worth as much as your mortgage at the end of its term. The endowment mortgage shortfall is the difference between how much the endowment will pay out when it reaches maturity and the amount you need to meet the outstanding mortgage on your property.

For millions of people, what should have been a healthy endowment surplus has been eroded by stock market adjustments to leave them short of their target value - hence endowment shortfall.

Endowment shortfall - an example

A typical example is a young male buying his first property in 1988, who was sold an endowment mortgage to cover a £33,000 mortgage on a 25 year term. The estimated value of the endowment policy at the end of its term was between £47,000 and £60,000. The projected value now is just £20,000. This means that he has a projected endowment shortfall of £13,000.

The endowment shortfall will mean that if circumstances do not change, when he reaches the end of his 25 year mortgage term he will have to find a further £13,000 as a lump sum in order to pay off his mortgage. However, if we can show that he was mis-sold the endowment policy, we will be able to make an endowment shortfall claim on his behalf and get compensation from his endowment policy company which will put him back on track to repay his mortgage as planned.