HOMEOWNERS with endowment mortgages are facing an average shortfall of £7,057 between the maturity values and the loans they need to repay, research showed today.

That is well up on the average shortfall of £5,800 the Financial Ombudsman Service said people faced six months ago.

Shortfalls are highest in the South and London - reflecting the bigger loans people need to meet higher prices.

Homeowners in the South need to find an extra £7,292, according to endowment specialist Seeing Red.

At the same time, 14 per cent of people in the South said their shortfall was more than £15,000.

Seeing Red found that people aged between 40 and 50 were on track to see a big gap between the maturity value of the policy and the mortgage it was taken out to pay off, with shortfalls averaging £8,114 for this age group.

Seeing Red managing director Steve Credie said: "Homeowners in the South, and those over 40, are most at risk of severe shortfalls.

"We advise these groups to seek advice now in order to restructure their finances, or seek compensation.

"While many people have restructured their finances, these people may still receive compensation if they were mis-sold a policy, and this money is often vital to paying the mortgage loan," he added.

First published: August 12