Tab Tracker links to the Bank of England base rate, which is currently at one per cent, and adds a margin starting from 6.8 per cent, giving rates from 7.8 per cent a year, or 0.65 per cent per month.
The product is aimed at borrowers who are planning a quick sale, want to take advantage of a cheaper interest rate, or don’t expect rates to rise during their term.
Tab’s existing 12-month fixed-rate bridging loans will still be available.
Duncan Kreeger (pictured), CEO and founder of Tab, said: “In the residential market, fixed-rate mortgages are more expensive than tracker rate mortgages. With a fixed-rate loan, the borrower is paying more for interest rate security. There’s only ever been the expensive option in the bridging industry but Tab Tracker will be cheaper than traditional fixed-rate loans.
“This new product allows us to sharpen our pricing and keep rates as low as possible while other lenders may speculatively and arbitrarily raise fixed rates to protect themselves against base rate rises. It’s a bold, radical reform that I don’t think anyone else is doing. We’ve also taken the decision to quote the interest on our loans annually for better transparency.”