Intermediary Product Guide

New solutions to old problems

Buy To LetEquity LoanThe Buy To Let Equity Loan helps your clientsgear up their buy to let borrowing - to 85%LTV - by topping up their existing loans.

It’s a second charge loan so there is no needto disturb the existing buy to let mortgagewhen capital raising and is an alternative toremortgaging.

Clients can borrow up to 20% LTV withCastle Trust.

This is a unique solution that can help yourclients expand their portfolios, gear up onexisting loans or help pay down an existingbuy to let loan.

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1 - No additional rental stress test

2 - No monthly repayments

3 - Loan repaid along with a share in growth in the property value

4 - Top up BTL loans to 85% LTV

BTL Equity Loan

EquityEquity

TraditionalBTL Mortgage

TraditionalBTL Mortgage

85% LTV .......................................................................

....................................................................... 70% LTV

Diagram shows an example of how a client could top up their buy to let borrowingfrom 70% LTV to 85% LTV, by using the Buy To Let Equity Loan.

Example

Expanding A Portfolio

Mr Grant had a buy to let property worth

£350k, with an existing mortgage £255k

(73% LTV). He wanted to raise funds but a

remortgage was proving difficult due to

the rental assessment.

His financial adviser recommended the

Castle Trust Buy To Let Equity Loan, which

was used to raise £42,500 (12% LTV) on

the existing property. This was then used

as a deposit for the purchase of a new

buy to let property.

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Use the Buy To Let Equity Loan to help expand property portfolios

Example

Paying Down Existing Loan

Mrs Wilson had a buy to let mortgage which

was at 85% LTV with monthly payments of

£576, on a pay rate of 7.29%. She wanted

to find a way of reducing her payments

but felt stuck as remortgaging was

proving problematic.

After advice from her financial adviser,

Castle Trust provided a loan of 20% LTV

and the capital raised was used to directly

pay down the existing buy to let mortgage

to 65% LTV and reducing monthly

repayments by £213.

Or it can be used to help pay down an existing buy to let loan

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Index Profit Share MortgageThe Index Profit Share Mortgage (IPS) is a flexible solution for HNW and BTL clients.

It is an alternative to our other products for clients who may prefer tobase the ‘profit share’ on an independent index - Halifax House Price Index- rather than the value of their own property.

u It is a second charge loan with no monthly payments (first charge available on unencumbered BTL)

u Available to buy to let clients, High Net Worth individuals and clients raising capital for a commercial purpose (see eligibility)

u Minimum loan size £25,000

u Minimum property value £250k (£50k for BTL)

u Clients can potentially borrow up to 50% of the property value

u Term 1 to 5 years (longer can be arranged by exception)

Repayment

Clients repay the initial loan PLUS one of the following options:

The Growth Version: (2 x growth in Halifax House Price Index) x initial loan

The Income Version: 1 x growth in Halifax House Price Index plus c5% annual yield - may be capitalised

The ‘Bespoke’ IPS: Between Growth and Income, for example 1.5 x growth plus 2.5% yield; or lessgrowth can be chosen, for example 0.5 x growth plus 7.5% yield.

Please note that on repayment the client will repay the initial loan, plus thegreater of the greater of the Index Profit Share (if any), and the MinimumRepayment Amount (which is at least 2.5% p.a.).

See www.castletrust-intermediaries.co.uk for more details

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Example

Growth Option

Castle Trust advances £225,000 on

a farmhouse in the East Midlands

worth £1.5m.

The loan is repaid after 3 years, during

which time the Index has risen by 14%.

The principal loan is repaid PLUS 2 x

the Index rise x initial loan. This works

out as:

Initial loan £225,000

PLUS

(2 x 14%) x £225,000 = £63,000

The total repayment is therefore

£288,000 (£225,000 plus £63,000).

Eligibility

To be eligible for an Index Profit Share Mortgage (IPS), then the client must meet one ormore of the following:

1. Be a High Net Worth applicant: Client must have an accountant’s certificate to meet this test to the effect that (and sign a declaration to that effect), showing for the last financial year:

– either the borrower’s net income after tax and national insurance was more than £150,000 or– the borrower’s net assets exceeded £500,000 excluding any value locked up in the primary dwelling, certain life assurance policies or any pension entitlements.

2. Be securing the charge against a buy to let property

3. Using the loan for a commercial purpose: the borrower can demonstrate that the proceeds of the loan are to be used “wholly or predominantly for the purposes of a business”

Example

Income Option

Castle Trust advances £300,000 on a

5 bedroom house worth £2.5m, to

provide capital for investment purposes.

Loan is repaid after 5 years during which

time the Index grew by 20%.

The principal loan is repaid plus 1 x the

Index rise plus 5% of the loan per

annum. This works out as follows:

Initial loan £300,000

PLUS

(1 x 20%) x £300,000 = £60,000

PLUS

5% of the loan per annum

(compounded) = £82,885

The total repayment is therefore £442,885

(£300,000 + £60,000 + £82,885)

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PartnershipMortgageThe Partnership Mortgage is anequity loan with no monthlyrepayments. It is truly innovativeand opens up a world of newsolutions for your clients.

This unique product allows yourclients to access up to 20% ofthe equity in their home -without any increase in theirmonthly payments. This capitalcan then be used for a widerange of purposes, including:

u Capital raising for business or partnership buy - in

u Funding a buy to let or second home

u Meeting school fees

u Providing funds for a mortgage deposit for children buying a home

u Funding a divorce settlement

Loan repaid by future sale of familyhome (when children have flownthe nest) plus a 40% share in anygrowth in the property value over

the term of the loan

Existing monthly mortgagepayments not impacted as no

monthly payments

Borrowed £54,000 (20% LTV) tohelp fund new purchase

Wishes to raise capital to help ex-partner buy flat and

retain family home

Client going through a divorce

Client has £270,00 property. Current LTV of 60%

uu

uu

u

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Becoming An Accredited Adviser

Our products are only available via accredited advisers. You can become accredited by

undertaking our training, delivered via a CII approved programme.

You can become accredited by undertaking our training which will allow you to claim 1 CPD

hour per hour of learning towards the CII member CPD scheme.

Just contact your local BDM who will explain the process.

You can find your local BDM’s contact details on our website.

Online Applications

You can make an online application via our intermediary website for the Buy To Let Equity

Loan and Index Profit Share Mortgage. You will need to obtain a password and user name,

which will be supplied to you as part of the accreditation process.

To make an online application for the Partnership Mortgage, this can be undertaken via MTE.

Please get in touch if you require assistance with any of this by calling 0207 166 6289

Your Local BDM

We have a national team of highly experienced Business Development Managers who are

there to help you. Please call your local BDM to discuss a case - you will find details of our

BDMs at www.castletrust-intermediaries.co.uk.

Your client’s property is at risk if they do not keep up payments on a mortgage or any

other loan secured to it.

What Else Should You Know?

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This information is for professional advisers. Castle Trust is the trading name of Castle Trust Capital plc which is

authorised and regulated by the Financial Conduct Authority.

Registered in England & Wales. Company number 07504954. Registered office: 10 Norwich Street, London EC4A 1BD.

M173 10/06/2014