The lender claimed that around 60 per cent of all endowment policy holders face an average shortfall of £10,000. But, in order to reduce mortgage capital in the same way as topping up an endowment, a top band taxpayer would need growth of 10 per cent per annum, in a no risk fund, to match the benefits of a flexible mortgage (if a mortgage rate of 6per cent per annum is assumed).
Rachel Ramsden, head of marketing at Britannic Money, said: "Many endowment policy holders are faced with a difficult decision as to how to compensate for poor fund performance for their endowment policies. By overpaying into their flexible mortgage they can reduce their outstanding mortgage balance, and alleviating some of the potential shortfall whilst enjoying all of the benefits that a flexible mortgage can offer."
