Castle Trust says its equity mortgage enables those with at least 40% equity in their UK home to release a cash sum of 20% of the property’s value, with no requirement to make monthly repayments, which they can use to help purchase an overseas property.
The firms latest research reveals that around 6% of Britons have tried to buy a property abroad since 2007, but were unable to secure a mortgage.
In seven out of 10 of these cases (71%), they had 40% or more equity in their UK homes and would have been eligible for a Castle Trust partnership mortgage.
Sean Oldfield, chief executive officer of Castle Trust, said: “It has been well documented that as a result of the financial crisis, residential property prices in the more desirable parts of Southern Europe have fallen dramatically, and this has tempted many to pick up holiday home bargains. In practice, however, they often need to secure a local mortgage and this can be very difficult to do.
“Our partnership mortgage will enable many homeowners seeking a property abroad to release 20% equity from their UK home, and use this instead of trying to persuade a local bank to help.
“Depending on how much equity is available, they may be able to buy outright, or only require a very small mortgage, which should be more easily obtained.”