Cheval has unveiled a same-day closed bridging product designed to minimise bridging loan costs for borrowers.
The same-day closed bridge means bridging loans are redeemed the day they are taken out, doing away with the need for consumers to pay interest over an extended period. To take advantage of the product, borrowers must have the means in place to redeem it – usually a remortgage – the day the bridging loan completes.
Mark Posniak, director of sales and marketing at Cheval, says: “This is an ideal product for property investors who can plan their purchases well in advance.
“Although borrowers won’t yet own the properties, the product can be arranged so that on the day a purchase is made, the long-term mortgages complete moments after the bridging loan.”
He adds: “On completion day, the bridging loan is used to buy the property. As soon as ownership changes hands, the remortgage is used to redeem the loan.”
The product has a flat rate charge of 1% per month plus broker fee on the amount borrowed. This compares well with the 1.45% plus fee seen on typical bridging loans when redemptions haven’t been arranged.
Andrew Montlake, partner at Co-balt Capital, says: “It seems Cheval has come up with an ex-cellent and competitively-priced product, which many landlords looking at building up property portfolios can benefit from.
“Its rate puts Cheval on the front line of bridging finance providers. This product, when combined with the lender’s levels of service and knowledgeable staff, is a fine addition to its range.”