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

Paul Howard, managing director (mortgages) at Castle Trust, said: “We will lend 20% of the property value with no monthly servicing cost. This, combined with the Kent Reliance’s three year fixed rate (70% LTV) mortgage at 2.99%, means that the monthly payments are way below any other 90% deal in the market.

“An alternative 90% LTV three year fix at, say, 3.89% would cost £991 per month on a £190,000 mortgage on a 25 year term. The new Castle Trust/Kent Reliance product reduces the monthly payment to £711 per month – a saving of almost 30%.

“Whilst 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 says its Partnership Mortgage complements conventional mortgages by sitting 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.