endowment mortgage

Noun

• A type of mortgage (typically a loan to buy a house) where, over the term of the loan, the borrower's regular payments to the lender cover only the interest charged by the lender. At the same time, the borrower makes regular payments into a separate savings or investment plan. When this plan matures, the borrower uses the proceeds to repay the principal of the loan. Contrasted with repayment mortgage.