Equity Linked Mortgage

With this mortgage the lender takes a portion of property fund and purchase the remainder themselves. You then get sent a small amount than you are able to buy your property with.

The lender will receive a proportion of the equity once your property has been sold. Thus benefiting from the rise in property value.

Here's an example for you to look at:

Lets say you buy a house valued at £100,000. The lender could for instance buy a stake of 20%. The value of your mortgage will therefore be £80,000. This will mean that your property will at the price of £150,000. The stake that the lender paid for your property(£80,000) will be paid back when it's finished. This gives them a repayment of £30,000 which gives the lender a £10,000 profit on their investment.