George Lee (Dublin South, Fine Gael)
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Question 93: To ask the Minister for Finance the number of endowment mortgages outstanding; the value of these outstanding mortgages; the anticipated shortfall in relation to the projected value of endowments on maturity and the size of the mortgage they are expecting; and if he will make a statement on the matter. [35290/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The popularity of endowment mortgages was at its height during the late 1980s and early 1990s, driven by factors such as mortgage interest relief and tax relief. Between 1989 and 1992 endowment mortgages represented over one third of total mortgages approved in Ireland but by 2003 the number of endowment mortgages approved as a percentage of total mortgages was only 3.4%. In 2004 the Financial Regulator wrote to the major life insurance companies and credit institutions seeking information on outstanding endowment mortgages.

The survey found that 47,759 endowment policies, which were originally linked to interest-only mortgages, remained in force. Of those, 23,264 still retained the related mortgage. This meant that 24,495 policyholders appeared to have repaid the related mortgage while retaining the endowment policy as a savings product. Mortgage lenders estimated that the outstanding endowment related mortgage loan amount owed at that time was approximately €1.2 billion. This represented 1.46% of the €82.23 billion residential mortgages of Irish residents as at 30 June 2005. The figure for residential mortgages of Irish residents as at 30 June 2009 was €113.86 billion.

It is not possible to state with certainty to what extent the maturity value of endowment policies will fall short of the amount required to repay the outstanding mortgage principal as this will depend on a range of issues, principally the performance of investment markets over the remaining term of the policy. However, at the time of the survey, the projected aggregate shortfall was estimated to be of the order of €89 million over the following 15 years.