Bridging lender Dragonfly Property Finance announced the launch of its unique ‘Bridge-to-Let’ product yesterday to widespread approval from brokers.

The new offering, which is a hybrid of a short and a medium term loan, offers a competitive rate of interest, which stands at 0.749 per cent per month – 8.99 per cent annually – at 70 per cent LTV.

Borrowers can also select the option to pay deferred interest, lowering the rate to just 0.583 per cent monthly or 6.99 per cent per year. 

The combination of Dragonfly’s two loan products means that customers can obtain a flexible seven-month bridge with a built-in “safety net”, which gives them the assurance of a guaranteed two or three month buy-to-let loan to take out the initial bridge.

In addition, borrowers are able to redeem their loan within the initial seven months with no financial penalties to fear. 

If the bridge is not repaid, customers are able to seamlessly switch to a two or three month loan without the need for additional underwriting or documentation.

Many intermediaries were quick to point out the advantages of Dragonfly’s new proposition.

Danny Churchill, Director at Pure Funding Solutions, said: “Dragonfly continues to show great innovation and appetite to assist customers requiring short term finance. The new Bridge-to-Let product is very competitively priced and, with a built in safety mechanism to switch to a longer term product, will definitely appeal to brokers and customers alike.

"Innovation in the short term market is commendable and the fact that Dragonfly have added this product to its existing range, demonstrates just how buoyant this particular sector of the mortgage market is."

Russell Martin, Managing Director of Finance 4 Business, said: “After having a lender meeting with Mark Posniak and Elliot Hyames of Dragonfly on Tuesday, we were able to identify and discuss an enquiry which fits their new Bridge-to-Let product perfectly. The deal is rate sensitive and because the case will be redeemed within six months the facility carries no exit costs, which further enhances the savings for the client. We have already fully engaged the client and the deal is proceeding. In principle, Dragonfly has agreed to lend a net loan of circa £2 million.

“The demand will be there for this product as it offers the cheapest rate at 70 per cent LTV with the added cushion for borrowers that if the loan doesn’t repay they have a built in Buy-to-Let loan ready and waiting.

“We also have another client at the moment that this deal suits perfectly. He is buying a large property in London and needs to complete quickly. He is going to be doing a very quick refurb to the property before either selling or letting out. This product will suit perfectly as he is able to secure refurbishment finance at 0.749 per cent per month (the nearest rate from the competition would be 1.25 per cent per month so we save the client 0.5 per cent per month!).

“This launch can only be a good thing for the market. I am certain others will try and replicate the product but this may prove difficult as not many bridgers have a three-year finance option available, and those that do are not typically at this competitive rate. I think the product is a fantastic tool for all brokers and we are delighted to have access to it.”

Danny added: "There is a definite demand for this type of product and I can really see it benefiting experienced refurbishment and development specialists, as well as seasoned Buy-to-Let Investors."