Dragonfly Property Finance has launched what it calls a ‘Bridge-to-let’ product.
It is a hybrid of a short and medium-term loan an is offered at 70% LTV.
The deal is aimed at borrowers who need to do minor works to their property in the bridging period and want the assurance of a guaranteed buy-to-let loan to take out the bridge.
The product is a two or three-year fixed rate product with an initial seven-month bridge period built-in. Interest, during both the initial bridge period and the remaining term of the two or three-year loan, is charged at 0.749% pm (8.99% pa). If borrowers select the deferred interest option, this lowers the pay rate further to 0.583% pm (6.99% pa).
Bridge-to-Let enables borrowers to redeem the loan free of penalties within the seven-month bridge period. If they are not able to redeem the loan within that period, borrowers can switch into Dragonfly’s two- or three-year medium-term loan.
The minimum loan size for the Bridge-to-Let product is £1 million, while the maximum loan size is £25 million.
An initial tranche of £50 million has been put aside for the launch.
“Bridge-to-Let gives borrowers the best of both worlds: the lowest ever interest rate on a bridging loan and a powerful built-in protection mechanism,” said Jonathan Samuels, CEO, Dragonfly Property Finance.
“With the typical bridging loan rate roughly 1.15% pm, the bridge we have built into the front end of this product — at 0.749% pm — is truly exceptional. And if borrowers can’t redeem within seven months, they are simply switched onto our medium-term product without needing to be underwritten for a second time. This product is both a hedge and a hugely powerful acquisition tool for professional property investors.”
