Borrowers can release a cash sum of 20% of their UK property’s value, with no obligation to make monthly repayments, which they can use to help purchase an overseas property.

Research from Castle Trust 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 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, 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.

“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.”

Instead of charging upfront interest, Castle Trust shares 40% of any increase in value on the sale of the property from the date when the equity mortgage is taken out. If the value of the home declines or stands still, borrowers only repay the original loan amount with no interest at all.

Castle Trust was launched in October 2012 with £65m of capital from US investment firm J.C. Flowers. The firm also offers an investment product, the House Tracker, offering returns based on the Halifax House Price Index with a minimum investment of £1,000.