The product, available from November 4th, will comprise a second charge equity loan of a maximum of 20% of the BTL property’s value which will top up a conventional BTL mortgage to an overall maximum of 85% loan to value ratio.
There is no monthly interest payment - instead of charging monthly interest, when the equity loan is redeemed, Castle Trust will receive its original loan plus a share (on a sliding scale) of any rise in the value of the property.
It has agreed strategic distribution partnerships with TBMC and The Buy to Let Business for the launch.
Paul Howard, managing director (mortgages) at Castle Trust, said: “This is hugely exciting for any buy-to-let investor who wants to grow their portfolio.
“For example, a customer with buy-to-let borrowing of 70% LTV can double the size of their portfolio using our product. So long as the case meets our underwriting criteria and the underlying primary mortgage passes its lender’s usual stress test, we will provide additional equity up to 85% LTV with no additional cashflow strain.”
Loans will initially be for any term up to maximum of 10 years with a 5% early redemption charge only in the first year.
Intermediaries can access the new product either by joining Castle Trust’s panel of accredited advisers or through its strategic BTL distribution partners, TBMC and The Buy to Let Business.
Andy Young CEO of TBMC, said: ”This is a very important development in the buy-to-let market and The Business Mortgage Company is pleased to be partnering with Castle Trust to distribute this unique offering.”
