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Are you looking for a bridging loan which will allow you to get the most out of the deal (leverage)?
A lender we have on our panel has introduced a bridging loan for both light and heavy refurbishments up to 80% LTV on day 1!
How does this 80% LTV Day 1 Bridging Loan product work?
You will find that most lenders ‘retain’ the interest which means the interest payments are deducted from the loan on day 1, resulting in a lower loan.
This product allows the interest to be ‘rolled up’ which means no interest payments are deducted upfront, instead they are rolled up into the facility and paid at the end. This is a huge benefit for people who are looking to get the most out of the deal as when we compared this to another lender, this product provided an additional £12,500 on day 1.
*This product does not provide funding towards the cost of the works, so you would need to ensure you have the funds available to complete the refurbishment. The loan is only to assist with the initial purchase.*
This product is available for both:
- Light refurbishments (any works which fall under permitted development).
- Heavy refurbishment (conversions such as large HMOs which require planning permission). For heavy refurbishments, the interest rate is slightly higher at 0.95% pcm.
See an example below of a light refurbishment project based on a purchase price of £250,000.
| Purchase Price | £250,000 |
| Gross Loan (day 1 loan + arrangement fee + interest) | £226,429 |
| Day 1 Loan Amount (80% LTV) | £200,000 |
| Interest Rate (FIXED) | 0.85% |
| Term | 12 Months |
| Arrangement fee (2.25%) | £4,500 |
| Total cost of borrowing | £26,429 |
Key highlights:
- Rolled up interest
- Up to 80% LTV on day 1
- Minimum day 1 loan of £200,000
- Lending against the open market value
How can Advocate Finance help?
Advocate Finance are specialists in bridging loans for refurbishment projects, so if you need a bridging loan for a light or heavy refurbishment you have in mind, please get in touch with me to discuss your options.
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