Entry from British & World English dictionary
A mortgage in which the borrower repays interest only and also contributes to a pension plan designed to provide an eventual tax-free lump sum, part of which is used to repay the capital at the end of the mortgage period and the rest to provide a pension for the borrower’s retirement.
- Although similar to endowment mortgages, a pension plan backs a pension mortgage instead of an endowment policy.
- The self-employed can also use a personal pension to fund a pension mortgage; the tax advantages are very significant.
- Acquiring property through a pension vehicle has been possible for several years but was usually confined to self-employed professionals and others who might, for example, have acquired their business premises via a pension mortgage.
For editors and proofreaders
Line breaks: pen|sion mort|gage
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