The short- and medium-term lender will be charging 6.99% pa for the product, but borrowers can choose to defer 2% of the interest payable to create an effective pay rate of just 4.99% pa.
The arrangement fee will remain at 2.5%, the minimum loan size at £50,000 with the maximum at £1.5m with the rental coverage 100% at the chosen pay rate.
A 3% ERC applies for the fixed rate period, but not in the final three months of the loan term.
If borrowers choose to pay 4.99% pa, the 2% deferred interest is payable upon redemption.
Dragonfly has introduced the rate cut at a time when landlords are finding it difficult to finance buy-to-let projects through mainstream lenders due to the shifting regulatory landscape and enhanced stress-testing.
The lender found this was a problem for larger, bespoke loans and ‘non-standard’ borrowers with unconventional circumstances or requirements, such as:
• semi-commercial properties
• 100% rental calculation
• company-structured applications (including on- and offshore entities and trusts)
• no minimum background income
• houses in multiple occupation
• first-time landlords
• maximum age beyond typical retirement
• unusual property types.
D’mitri Zaprzala, head of sales at Dragonfly, said that this was a lending gap it was more than happy to fill.
“At Dragonfly, we pride ourselves on being able to take a view on individual borrowers, however unusual their circumstances or requirements.
“We don’t box tick, but look at each application on its merit and make a decision based on that.
“At a time when mainstream lenders are tightening their buy-to-let criteria, we are open for business and this latest product launch will hopefully make that very clear to brokers.”
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