With interest-only loans fast disappearing from the high street, the new product will act as a powerful portfolio tool for professional property investors and landlords.
The short and medium term lender’s four and five-year products are both available up to 70 per cent LTV and are priced at 8.49 per cent, with the option to defer one per cent until redemption of the loan (giving an effective pay rate of 7.49 per cent).
The loans are exclusively available to finance properties in England and require 100 per cent rental cover. A sliding scale of early repayment charges applies, levying costs of between six and three per cent depending on how early the loan is repaid.
Product Sheet:
|
4 or 5-year Buy-To-Let Product |
|
|
Fixed Term |
Up to 5 years |
|
Max LTP |
Up to 85% |
|
Max LTV (based on 180 day market value) |
Up to 70% |
|
Min Loan |
£100,000 |
|
Max Loan |
£10m |
|
Min Property Value |
£200,000 per security |
|
INTEREST RATE |
|
|
Option 1 – Up to 70% LTV |
8.49% |
|
Option 2 – Up to 70% LTV |
7.49% |
|
ERCs |
|
|
5-year product |
6% / 6% / 5% / 4% / 3% |
|
4-year product |
6% / 5% / 4% / 3% |
|
RENTAL COVERAGE |
|
|
Option 1 & Option 2 |
100% |
|
FEES |
|
|
Facility Fee |
3% |
|
Proc Fee |
From 1.25% |
|
Administration Fee |
£350 |
|
Legal Fees |
From £975 |
The product is only available on a first charge-basis and for tenanted residential investment properties.
There is no owner occupied lending with the product, and any previous adverse will also be considered on an individual basis. Interest is charged on a monthly basis and can be retained for the full term.
Including this recent addition, London-based Dragonfly Property Finance now offers a full range of market-leading medium term buy-to-let products, ranging from two to five years in length.
Jonathan Samuels, CEO of Dragonfly, said: “The demand for buy-to-let is growing by the day and yet the feedback we receive from brokers is that the products simply aren’t there to meet it. Landlords want interest-only but, with the high street banks as risk-averse as ever, increasingly they’re not getting it."
He added: “The new four and five-year buy-to-let products emerged from these conversations with brokers and are a natural extension to our popular two and three-year products.
“What’s very clear is that alternative finance has taken root in the UK. The monopoly of the high street banks in relation to property finance is well and truly over. In fact, you could say that alternative finance is fast becoming mainstream.”
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