Your 'deposit amount' is loaned to the company that buys the property as an equity investment. The property is funded with a 70% first charge mortgage and a 30% equity loan. The equity loan is part funded by your 'deposit' and part funded by equity lenders.

The first charge mortgage is an interest only mortgage. The amount to be repaid is fixed at the start and is paid out from sale proceeds, before equity lenders are repaid. Therefore the equity lenders benefit from the full increase in the property value, as well as suffer the full loss if property prices drop.

This increase or decrease in property value is shared between you and the equity lenders, in the respective funding proportions. For example, if your equity funding is 6% and equity lenders fund the remaining 24%, the share of funding is

• Equity lenders: 24/30 = 80%
• You: 6/30 = 20%

Please note, in addition to the equity funding, the taxes and costs of the purchase are to be funded separately and shared between you and the equity lender in the same ratio.