Castle Trust Bank has unveiled its ‘Bridge the Gap’ product, designed to offer a solution for borrowers nearing the end of their current fixed-rate or bridging loans who are hesitant to commit to a new buy-to-let mortgage amidst anticipated interest rate reductions in 2024.
This product is particularly aimed at property investors looking to establish a letting track record before securing a long-term loan, recognising that some lenders require a minimum of 12 months’ borrowing history.
The ‘Bridge the Gap’ product comes with a 12-month term, serviced interest, and a competitive interest rate of 0.52% per month (6.24% annually), with early repayment charges applicable only for the first three months.
It allows for a higher initial borrowing capacity by enabling loan servicing from day one, offering up to 75% loan-to-value (LTV) including the arrangement fee. For loans with rolled-up interest, the maximum LTV remains at 75% gross. The product also features a 5.5% arrangement fee and no exit fees.
Anna Lewis (pictured), commercial director at Castle Trust Bank, said: “Bridge the Gap is a product that specifically addresses a growing demand that brokers are seeing for bridging finance that can buy property investors time whilst they wait in hope that rates will continue to fall in the next year.
“By introducing a 12-month bridge loan with a reduced interest rate, increased arrangement fee and no exit fee, we can provide investors with the flexibility that they need to best manage the rate cycle.”
