Castle Trust Bank has launched a heavy refurbishment bridging product, with a drawdown facility.
The lender says the loan can be used to finance conversions, such as a house to flats or flats to house, commercial to residential projects, or work on houses in multiple occupation.
The product is available at up to 75% loan-to-value net, with a loan to gross development value of 70%. The maximum cost of works undertaken is £1m and the minimum drawdown is £50,000, with up to five drawdowns allowed across the duration of the project.
It runs for an 18-month term, with loan sizes from £250,000 to £5m. The rate is 0.99% per month and there is a 2.25% arrangement fee, with 1% charged on each drawdown.
The lender says its heavy refurbishment and light heavy refurbishment bridge products include net LTV calculations, which means that fees and interest can be added to the loan above the maximum LTVs.
Castle Trust Bank commercial director Anna Lewis says: “We saw there was an 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.”