Endowment Loan

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Dictionary Says

Definition of 'Endowment Loan'

A type of mortgage in which the borrower makes only interest payments on the mortgage, while payments that would have gone to repay the principal are instead funneled into an endowment fund. Under an endowment loan, the borrower does not repay the principal until the mortgage expires.
Investopedia Says

Investopedia explains 'Endowment Loan'

Endowment loans offer many incentives for borrowers, however, they can be riskier than traditional mortgages. When repaying an endowment loan, borrowers have a lower monthly payment, since no principal is being repaid. During good economic conditions, contributing to the endowment fund allows the borrower to earn interest on money that would have been repaid as principal.

The main risk with an endowment loan is derived from investing in the fund. Because no principal is repaid during the life of the mortgage, the borrower must rely on the investments performing well. If the fund loses value, the borrower could lose much of his or her investment in the endowment fund, but will still be required to pay the full mortgage amount.
Search results for

'Endowment Loan'

  • Insurance: Avoiding The Modified Endowment Contract Trap

    http://www.investopedia.com/articles/insurance/10/avoid-modified-endowment-contract-traps.asp
    ... Policies that fail this test are now classified as modified endowment contracts
    (MEC ... then withdraw both the interest and principal as a tax-free loan, as long ...
  • Dying Careers And How To Survive Them - Investopedia.com

    http://financialedge.investopedia.com/financial-edge/0610/Dying-Careers-And-How-To-Survive-Them.aspx
    ... Charitable donations are down and endowment funds are still recovering
    from the stock market turbulence. Foundations lost 30% of ...
  • The Secret To Consistent Returns In Any Market - Investopedia.com

    http://financialedge.investopedia.com/financial-edge/1009/3-Tips-To-Optimize-Your-Asset-Allocation-.aspx
    ... (Learn more about bubbles and busts in our Market Crash Tutorial.) Conversely, until
    2009, the Yale University endowment hadn't seen a negative year in two ...
  • What's the difference between institutional and non-institutional ...

    http://www.investopedia.com/ask/answers/06/institutionalinvestor.asp
    ... pension funds, mutual funds, money managers, insurance companies, investment banks,
    commercial trusts, endowment funds, hedge ... $30K Home Equity Loan, 5.74%, 5.77% ...
  • How are life insurance proceeds taxed?

    http://www.investopedia.com/ask/answers/09/life-insurance-tax.asp
    ... This tax-free exclusion also covers death benefits payment made under endowment
    contracts, worker's compensation insurance ... $30K Home Equity Loan, 5.74%, 5.77%. ...
  • Potential Consequences Had The US Defaulted - Investopedia.com

    http://financialedge.investopedia.com/financial-edge/0811/Potential-Consequences-Had-The-U.S.-Defaulted.aspx
    ... As stock and real estate prices declined, endowment portfolios of colleges and
    universities would shrink, further limiting the funding of scholarship programs ...
  • The New Retirement Age - Investopedia.com

    http://financialedge.investopedia.com/financial-edge/0811/The-New-Retirement-Age.aspx
    ... According to a May 2011 online poll commissioned by the National Endowment for
    Financial Education (NEFE), 59% of parents are providing financial assistance ...
  • 7 High-Paid Public Service Jobs - Investopedia.com

    http://financialedge.investopedia.com/financial-edge/0711/7-High-Paid-Public-Service-Jobs.aspx
    ... out an educational facility is worth it. Check out A Career In Endowment
    Management.). The Bottom Line Overtime, benefits and job ...
  • Charity CEOs: Are They Being Paid Too Much? - Investopedia.com

    http://financialedge.investopedia.com/financial-edge/0711/Charity-CEOs-Are-They-Being-Paid-Too-Much.aspx
    ... Krens, Solomon R., Guggenheim Foundation Salary (2008): $1,716,343 Under Krens'
    guidance, the foundation saw a six-fold increase in the museum's endowment. ...
  • This Week in Financial History: Speculative Bubbles, Bill Gates ...

    http://financialedge.investopedia.com/financial-edge/0310/This-Week-in-Financal-History-Speculative-Bubbles-Bill-Gates-Coca-Cola-and-Capitalism.aspx
    ... lived). In 1913, John Rockefeller chose March 14 as the day to launch the
    Rockefeller Foundation with a $100 million endowment. Finally ...

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