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Light Refurbishment – Bridge to Let Product Comparison

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Light Refurbishment – Bridge to Let Product Comparison

In a previous post, we explained the benefits of the bridge to let proposition offered by Precise Mortgages (Link to post). In this post, I compare the Products offered by Precise Mortgages with a product from Shawbrook Bank and explain the pros and cons of both.

Both products are very competitive and unique to the market but the main difference between the products is day one leverage.  With Shawbrook Bank, not only do they provide some highly competitive bridging rates starting from 0.80% Per Calendar Month (PCM) at 75% Loan to Value (at time of writing) they can also fund 10% towards the cost of works on light refurbishment projects.

In the previous article it explained the process of the Precise product, the following is a brief overview of the process of the Shawbrook product:

We submit an application to Shawbrook on a bridging basis and inform them that the exit plan is to remortgage onto their BTL mortgage. The underwriters will assess the deal as a bridge but also a BTL mortgage and look at the total feasibility. Once the bridge is completed and the works have been carried out to the property, it will be time to refinance onto Shawbrooks BTL mortgage.

The application process for the BTL mortgage is very efficient and streamlined as they already have most of the information. Investors can complete on the BTL mortgage and release equity from the property with a re-inspection by the valuer and a short application process.

How Do The Precise Product and Shawbrook Product Compare?

Below is a table comparing the 2 products, the rates are based on maximum lending.

PRECISE MORTGAGES SHAWBROOK BANK
BRIDGE BRIDGE
Bridging Rate (PCM) 0.79% 0.80%
Max LTV 75% 75% (plus 10% works funded)
Arrangement Fee 0.75% 1.95%
BTL MORTGAGE BTL MORTGAGE
BTL Rate 3.94% 4.79%
Reversion Rate 6.03% 4.79%
Max LTV 80% 75%
Arrangement Fee 1.5% NIL

The products are both competitive and offer similar proposals, as mentioned before. You can see from the table Shawbrook can fund that extra 10% towards the works in effect providing 85% LTV funding on day one.  Although, Precise offer the more competitive BTL product, this does come with a reversion rate of 6.03% whereas Shawbrook offer a lifetime tracker which will not revert to a higher interest rate after the initial term.

How we can help you

We believe it’s important that professional investors have a specialist broker with access to and knowledge of these products in their arsenal, as these particular products can not only give investors peace of mind that an exit plan is in place but also the potential to save them a substantial amount of money. Call us today for a free consultation and more details about these two fantastic products.

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