The deal tracks at Bank Base Rate plus 0.54 per cent for the life of the loan, giving a current pay rate of 5.79 per cent. It has early repayment charges of 3 per cent of the total drawdown for the first three years.
The product lends up to 95 per cent of the cost of the property and then up to a further 95 per cent of the costs of improvements in phases at the start of each stage of the refurbishment. Borrowing is capped at 85 per cent of the enhanced value of the completed renovation.
It also allows positive cashflow for borrowers, as money is released prior to each stage of development starting.
James Cotton, mortgage specialist for London & Country, said: “A major renovation requires a lot of finance, but only in stages, so it’s good to have a deal that releases money when it’s needed. Brokers have to work out whether it’s cost-effective for the borrower.”
Brian Ewing, head of intermediary sales at IF, said: “With more homeowners looking to refurbish their properties, we are keen to offer a competitive offset deal with value and flexibility.”
