Endowment mortgage is a type of mortgage where you don't have to pay back the principal amount you borrowed from the lender. Instead, you only pay interest and the premium for the endowment policy you took out. At the end of the mortgage term, which is usually 25 years, the endowment policy has grown enough to pay off the mortgage loan. In this package, you would also pay for life insurance that would pay off the loan if you died, since there is no guarantee that your endowment policy would pay off your mortgage.
The endowment policy has two parts: a life insurance part and an investment part. If you die during the policy, the life insurance part will pay off your mortgage debt, and if you live until the policy ends, the investment part will pay off your mortgage. But this part isn't guaranteed because some people find that their endowment policy isn't on track or isn't enough to pay off their mortgage debt at the end of the policy or mortgage. This makes them look for other ways to make up the difference, which is why endowment mortgages aren't as popular as other mortgages.
With an endowment mortgage, you only pay the interest. The principal stays the same. If the endowment policy does well, it will pay off the mortgage debt at the end. If it doesn't do well, you'll have a huge amount of debt to pay off.
You may get a letter from the endowment company saying that your policy isn't on track and that there isn't enough money to pay off your mortgage at the end of the policy. If you get this letter, you shouldn't wait to take action, but you also shouldn't panic and make a decision before you have all the facts. Don't cash in your policy, but don't ignore it either, because things will only get worse if you don't act right away.
On top of that, you ask your financial advisor for advice or talk to your lender about what's going on.
