The product is a two or three-year fixed rate product with an initial seven-month bridge period built in.
Borrowers can either redeem the loan free of penalties within the seven-month bridge period, or they can seamlessly move on to Dragonfly’s two or three medium term loan if they choose not to repay the bridging facility. This means there is no further underwriting needed or additional documentation.
The two-part loan offers a competitive rate of interest, which stands at 0.749 per cent per month – 8.99 per cent annually – at up to 70 per cent LTV. This rate is at a significant discount to their standard bridging rates (typically 1.15% per month), allowing borrowers to take advantage of cheaper finance while guaranteeing a buy-to-let rate after the renovations are complete.
Minimum loan size on this product is £1m with a maximum loan size of £25m. The initial tranche size of the product is £50m but Dragonfly says that if it takes off it’s looking to expand the amount available.
Dragonfly’s chief executive officer Jonathan Samuels says that the product has been designed to give borrowers the best of both worlds – a low bridging rate and a built in protection mechanism when exiting the loan.
He says: “With the typical bridging loan rate roughly 1.15 per cent per month, the bridge we have built into the front end of this product is truly exceptional.”
The Vision Finance team believe the product will be very well received by property developers and investors alike. Traditional bridging lenders such as Dragonfly are now offering a cheaper and reliable route to finance that is available within a matter of days if required.
If you believe this product could be suitable for one of your clients, please speak to one of our bridging experts on 0207 206 2500.