Castle Trust has unveiled a first-time buyer product in partnership with Kent Reliance with a headline rate of 2.99%.

The product combines a three-year fixed rate mortgage at 70% LTV with a second charge equity loan, which sits between the borrower’s own equity and the main mortgage.

The product is available up to 90% LTV and is offered at 2.99%, something the firm described as ‘ultra-low’.

Castle Trust said that the product mirrored the government’s Help to Buy equity loan scheme but borrowers would be given added flexibility to take a mortgage on older houses rather than solely new builds.

The Castle Trust equity loan will be repaid when the property is sold, with the firm taking a 40% share of any rise in the value of the property.

Broker commission for the product is 1%. Paul Howard, mortgages managing director at Castle Trust, said:

“We will lend 20% of the property value with no monthly servicing cost. This, combined with the Kent Reliance’s three-year fixed rate (70% LTV) mortgage at 2.99%, means that the monthly payments are way below any other 90% deal in the market.

“An alternative 90% LTV three-year fix at, say, 3.89% would cost £991 per month on a £190,000 mortgage on a 25 year term. The new Castle Trust/Kent Reliance product reduces the monthly payment to £711 per month – a saving of almost 30%.

“Whilst the Help to Buy scheme is there for some purchasers of new build property we are the only provider of equity loans on properties at least two years old and our criteria are much more flexible. This offer is unique.”