Endowment Policies
During the course of the mortgage, premiums are paid to a life assurance company for the endowment policy which will ensure that in the event of your death, the outstanding loan is repaid. Assuming that the endowment policy increases in value in line with projections made at outset, the loan will be repaid at the end of the mortgage term by the proceeds.
Pension Policies
These work in a similar way to an endowment policy in that the mortgage is repaid from the tax free cash sum available from the pension policy. Tax relief on the pension contributions are available at your highest marginal tax rate.
Individual Savings Accounts
These are tax efficient saving schemes linked to shares which are offered by many institutions, and operate in a similar way to an endowment policy. At the end of the term, provided the Individual Savings Account has grown in line with the assumptions made at outset, the reloan will be repaid from the proceeds.
The most suitable method of repaying your mortgage will depend on your financial circumstances, attitude to risk, age, and financial position.
Vantis Financial Management Limited will provide you with an unbiased appraisal of the most appropriate repayment method for your circumstances.
It should be borne in mind that some of the investments described above can go down in value as well as up. In certain circumstances you may get back less than the amount invested. It should also be understood that past performance is not a guide to future performance.
The information set out above is based upon current legislation, and Inland Revenue practice, which may be subject to change in the future.