Mortgages  

Castle Trust offers 90% LTV first-time buyer deal

Castle Trust has launched a three-year fixed rate product for first-time buyers in partnership with Kent Reliance.

Castle Trust will lend 20 per cent of the property value with no monthly servicing cost.

Paul Howard, managing director of mortgages at Castle Trust, said this, combined with the Kent Reliance’s three-year fixed rate 70 per cent loan-to-value mortgage at 2.99 per cent, means monthly payments are a lot less than any other 90 per cent LTV deal in the market. He claims that Castle Trust’s deal chops almost 30 per cent off the monthly cost of a 90 per cent purchase mortgage.

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Mr Howard said: “While the Help to Buy scheme is there for some purchasers of new build property we are the only provider of equity loans on properties at least two-years-old and our criteria are much more flexible. This offer is unique.”

Castle Trust’s Partnership Mortgage sits as a second charge equity loan between the borrower’s own equity and the main mortgage.

There are no monthly payments and Castle Trust only receives any rent on its share of the property when the property is sold, the loan matures or when the borrower decides to repay.

The rent is not guaranteed, instead Castle Trust accepts a share of the increase in the value of the property from the date their loan is taken out.

In some cases Castle Trust could have to swallow a loss if the value of the property has gone down.

Fees payable include a valuation fee, an administration fee of £130 and a product fee of £995.

There is an early redemption charge within the fixed rate period of 3 per cent of the amount repaid by way of capital repayment or in full redemption.