Thousands more homeowners could find that their endowment policies will not fully repay their mortgages because the regulator’s forecast rates of investment return are too optimistic.
The Financial Services Authority is facing pressure to reduce the mid-range projection rate of 6% net per year, which it has used for around five years.
This will be a blow to most of the UK’s 8.5m mortgage endowment holders, 5.3m of whom have already been warned of likely shortfalls in their policies and who could now face even larger ones.
References: Daily Telegraph 17/04/04 page 27
