For those who are relying on their endowment mortgage for yearly funds, the news has not been good as banks drop their rates on these products. The overall return for endowment mortgages has dipped severely over the past few years, despite reports from banks that they were still profitable. This has left many with endowment mortgages at a loss, and some have been unable to meet their expenses. The trend is expected to continue as this is one area where rates are actually dropped. For traditional mortgages, rates are going up, but this is small consolation for those who need help with their endowment mortgage returns.Melanie Bien, director of the independent mortgage broker Savills Private Finance, said “Even though the base rate is coming down, it does not follow that rates on mortgage deals will do the same. In fact, lenders are moving in the other direction, with several raising their fixed rates in the past couple of days. Unfortunately, we expect this to continue.”Experts are recommending that those with endowment mortgages start putting aside some cash and think about transferring their loans to another company with a higher rate of return. However, these trends are expected to continue, and it may be difficult to get a better rate of return right now.
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