The reigning champions opened impressively, leading 0-4 to 0-0 after just 11 minutes through Tomás Sheehy, George Sunderland, Conor Carty and Andy Merringan.
Points from Philly Cullen and Paul Murphy free hauled Sarsfields back into the game and Castletown were dealt a real setback when Kevin Morris was sent off.
But in stepped Masterson with a wonderful goal to give his side a 1-6 to 0-3 interval lead.
Castletown set out their second-half stall pulling their wing forwards back. They eventually found the target through Paul Murphy and Philly Cullen pointed frees, while Cullen kicked his sides first point from play after 41 minutes leaving it 1-6 to 0-6.
Castletown added points through Jody Shaughnessy and Brendan Halpin, while the Sars goal from Tomas Campbell arrived two minutes into additional time, too late to affect the result.
Meanwhile a David Shannon 45 three minutes into additional time gave Horeswood a 1-12 to 1-11 victory over Fethard in the opening semi-final. Horeswood looked comfortable when PJ Banville extended their lead, but a Gareth Foley goal inspired Fethard as the game moved into additional time when Shannon got that all important 45.