The ‘Partnership’ mortgage is only available on 20% of the property’s value and, rather than charging interest, Castle Trust takes 40% of any profit made by the homeowner when they come to sell their property, or 20% of any loss. It will not share in any loss incurred if the mortgage is repaid other than on the sale of the property, or at the end of the mortgage term, or if it was taken out as a remortgage or a further advance.

In order to access the deal, a first-time buyer or homemover needs a 20% deposit, with the remaining 60% of the debt financed by a mortgage from a traditional lender.

The product will only be available via independent intermediaries who have passed Castle Trust’s professional development accreditation from the Chartered Insurance Institute.

Sean Oldfield, chief executive officer at Castle Trust said:

“It is well documented that many people, despite having good credit histories and sizeable deposits or equity in their homes, are finding it difficult to secure mortgages. This is a result of lenders’ desire to preserve capital. The partnership mortgage helps lenders overcome this issue so many more good quality customers can secure the mortgage they want. “

While the 0% interest rate sounds simple and appealing, there will of course be interest to be paid on the traditional mortgage supporting the 60% debt. Mortgage experts calculate that the Partnership Mortgage will appeal to those who believe that house prices will increase at less than 3.5 per cent a year going forward.