A promising new mortgage product

A new mortgage product aims to help buyers boost their deposit in return for a share in any profts from the eventual sale of the home. So what exactly is the deal and is it any good? Ruth Jackson investigates.

With the housing market in the doldrums and mortgage lending languishing too, news of a new mortgage product was always going to cause excitement. So it was last week when the newly launched Castle Trust said that from September it would offer a new Partnership Mortgage. But what exactly is the deal and is it worthy of the attention it is getting?

Castle Trust has a respectable pedigree. It is backed by US private-equity firm JC Flowers and chaired by Sir Callum McCarthy, former chairman of the Financial Services Authority (FSA). At first glance, its product looks fine. Castle Trust lends you up to 20% of the value of the house you intend to buy. This lets you boost the deposit you can offer your lender and so bring down the loan-to-value ratio (LTV) of the mortgage. This will allow those who wouldn't normally be able to get a mortgage on traditional terms into the market, and others to get a lower rate than they would otherwise.

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Ruth Jackson-Kirby

Ruth Jackson-Kirby is a freelance personal finance journalist with 17 years’ experience, writing about everything from savings accounts and credit cards to pensions, property and pet insurance.

Ruth started her career at MoneyWeek after graduating with an MA from the University of St Andrews, and she continues to contribute regular articles to our personal finance section. After leaving MoneyWeek she went on to become deputy editor of Moneywise before becoming a freelance journalist.

Ruth writes regularly for national publications including The Sunday Times, The Times, The Mail on Sunday and Good Housekeeping, among many other titles both online and offline.