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With an Investment-Linked Mortgage, you contribute towards an investment or savings plan, such as an ISA, which should build up a cash sum large enough to pay back the loan.
The type of investment plan may vary according to what is currently available in the financial market.
You can make two or more payments per month; interest on the mortgage and contributions to one or more investment plan(s).
Interest is paid to the lender. Contributions to investment plans are paid to the plan provider.
Important Points
 You can contribute to investments of your own choice.
The investment plans may be assigned” to the mortgage.
Depending on prevailing regulations, you may be able to boost your investment plans with additional lump sums or regular contributions.
Remember that the value of investment can go up as well as down!
If an investment performs badly, it may not provide enough to repay the loan. It is your responsibility to make sure that you have enough to repay the loan at the end of the term.
Even though a Pension Mortgage does not always require a life assurance policy, it is advisable to arrange one (at the very least “term assurance”) to make sure that the loan can be repaid if you die. If you do not do this, the property may have to be sold in order to repay the mortgage.
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