The new product is available up to 75% LTV net, with a 70% LTGDV
Castle Trust Bank has launched a new heavy refurbishment bridging product, featuring a drawdown facility, which can be used to finance conversions, such as a house to flats or flats to house, commercial to residential projects, or house in multiple occupation (HMO) conversions.
The new product is available up to 75% loan-to-value (LTV) net, with a loan to gross development value (LTGDV) of 70%. The maximum cost of works undertaken is £1 million and the minimum drawdown is £50,000, with up to five drawdowns allowed across the duration of the scheme.
The product has an 18-month term, with loan sizes available from £250,000 to £5 million. The rate is 0.99% per month, and there is a 2.25% arrangement fee, with 1% charged on each drawdown.
The bank offers brokers a specialist bridging proposition, which includes specialist products for heavy refurbishment, light refurbishment, and a bridge product that can be used for chain breaks, quick purchases, auction purchases, and development exits.
Light refurb and heavy refurb bridge products include net LTV calculations, meaning fees and interest can be added to the loan above the maximum LTVs.
Recent broker research carried out by Castle Trust Bank has revealed that refurbishment has been the most popular type of specialist property investment in the last three months.
The new product, the lender said, gave borrowers greater flexibility and the opportunity to reduce their overall borrowing costs.
“At Castle Trust Bank, we are always looking at ways we can enhance our proposition for our brokers and their clients,” remarked Anna Lewis (pictured), commercial director at Castle Trust Bank. “We saw there was appetite from investors undertaking heavy refurbishment projects to reduce their overall cost of borrowing by only drawing down the funds as and when they needed them.
“With our new heavy refurbishments with drawdowns product, borrowers only pay interest on the total balance of the loan they have drawn down. This means they are not wasting money by holding borrowed money but can instead stagger their borrowing for when they have costs to fund.”
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