Castle Trust Bank has launched a new heavy refurbishment bridging product, featuring a drawdown facility that gives borrowers greater flexibility, as well as the opportunity to reduce their borrowing costs.
The heavy refurbishments with drawdowns product can be used to finance conversions, such as a house to flats or flats to a house, commercial to residential, or houses in multiple occupation (HMO) conversions.
It is available up to 75% loan-to-value (LTV) net, with a loan-to-gross-development-value (LTGDV) 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 scheme.
The product has an 18-month term, with loan sizes available 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.
Castle Trust Bank’s light refurb and heavy refurb bridge products include net LTV calculations, meaning that fees and interest can be added to the loan above the maximum LTVs.
Anna Lewis (pictured), commercial director at Castle Trust Bank, said: “At Castle Trust Bank, we are always looking at ways we can enhance our proposition for our brokers and their clients.
“We saw there was 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.”
