bright light

Many with endowment mortgages are trying to spread out their risks by going co-op with friends or family. Although many had hoped that the rate of returns on endowment mortgages would remain high, the opposite has been the case. As such, many that were relying on their endowment mortgages to pay for their retirement have been forced to seek new options in an effort to stay solvent. Some may be getting in over their heads, but few have little choice if they can no longer live on their endowment mortgage returns with the current low rates.

Louise Cuming, head of mortgages at moneysupermarket.com, said: “Tying customers into a current account with the lure of an attractive mortgage product range is a clever move by the Co-operative Bank. By targeting its current account customers, the Co-op can cherry pick the most financially sound applicants, so its market leading rate will only be available to market-leading applicants. Co-op customers with equity or a sizeable deposit will be laughing as they are eligible for the 5.99% mortgage rate. But borrowers without these will pay much higher rates - further widening the gap between the haves and have-nots.”

Related reading: Endowment Mortgage