Castle Trust unveils drawdown heavy refurb loan

The deal includes a drawdown facility, which the lender said offers borrowers greater flexibility over when they access the funds for the project.

The product has been designed to finance conversions, such as turning a house into flats, HMO conversions, or adapting commercial into residential properties.

The heavy refurbishment deal is available at up to 75 per cent loan-to-value net, with a loan-to-gross-development-value of 70 per cent. It can be used for works of up to a maximum of £1m, with a minimum drawdown of £50,000. Borrowers can make use of up to five drawdowns across the duration of the product.

The heavy refurbishment bridging loan has an 18-month term, and is available on loans ranging from £250,000 to £5m. It comes with a rate of 0.99 per cent and a 2.25 per cent arrangement fee. A further one per cent fee is charged on each drawdown.

Castle Trust’s range includes products for heavy refurbishment and light refurbishment as well as a bridge which can be used for chain breaks, auctions and development exits.

The use of net LTV calculations means that fees and interest can be added to the loan above the maximum LTVs.

Anna Lewis (pictured), commercial director at Castle Trust, said the lender was looking to enhance its proposition and had picked up on the appetite among investors taking on heavy refurbishment projects to cut the overall cost of borrowing by only drawing down the funds as and when needed.

She continued: “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.”

Last month Castle Trust updated its bridging range by adding sale and refinance options, as well as launching new fixed rate products.