Castle Trust to launch "partnership mortgage"
Divorcing couples are to be targeted by a loan company providing a new type of mortgage.
Equity loan provider Castle Trust has said it will target couples who are divorcing or splitting up with its “partnership mortgage”. It enables couples who have at least 40% equity in their home to release 20% of the value of the property. No rent or interest is charged on the loan, but Castle Trust shares 40% of any increase in the value of the sale of the property from the date when the mortgage is taken out.
If the house price declines or stands still then borrowers repay the original loan amount only.
Castle Trust say the mortgage will help one partner stay in the home while releasing equity to help the other buy a new property.
Richard Collins, family law partner at Charles Russell, says: “Often clients have to sell the matrimonial home on divorce and the net proceeds of sale are needed to downsize and buy two separate properties in cheaper areas. That is usually only possible with a competitive mortgage.”
