Definition, Meaning & Synonyms

endowment-mortgage

financial term

/ˌɛndəʊmənt ˈmɔːɡɪdʒ/

Definition

A type of mortgage where the borrower pays only the interest during the term of the loan, with the principal amount being repaid at the end through the proceeds of an endowment policy.

Examples

Many homeowners choose an endowment-mortgage for its potentially lower initial payments.
After 25 years, the endowment policy matured, allowing the repayment of the endowment-mortgage.

Meaning

An endowment-mortgage combines a mortgage with an endowment policy, allowing homeowners to pay lower monthly installments while ensuring a lump sum payout at the end of the mortgage term.