The firm said its new product would expand the appeal of the sector to High Net Worth individuals who wouldn’t have otherwise considered bridging finance. The product boasts a monthly rate of 0.749% per month, with a deferred option available at 0.583%.
The new product consists of two or three-year buy-to-let product, with a seven month bridging period built into the start of the deal. The minimum loan size is £1m, which the lender said would appeal to investors with a property portfolio.
Dragonfly told Mortgage Solutions that when the bridge period is complete the loan will immediately switch to a medium-term loan without the need for further applications or underwriting.
Jonathan Samuels, CEO at Dragonfly, said that this product would shake up the entire bridging market.
“This will change the market and we think other firms may not be able to follow. We chose a seven month bridging period because the majority of our bridges are redeemed in that time, but people still want the safety in the event they take longer.
“Around 80% of our loans wouldn’t enter the second stage but we know that people want a safety net and we’re encouraging people to take advantage of the low rate even if they don’t intend to use the buy-to-let period.”
Mark Posniak, head of marketing and operations at Dragonfly, told Mortgage Solutions that the product would appeal to people looking to take out their first bridging loan.
“If you exit the bridge period without redeeming the loan we move you straight onto the buy-to-let deal. We expect very high demand because, even without the buy-to-let component, the rate is nearly half what you would expect for this type of loan.
“This product gives piece of mind to borrowers, especially those completing a bridge for the first time. Lots of people are scared off bridging because they worry about what happens if they can’t redeem the loan, but this product removes that danger.”
