Development loan

For the development, redevelopment or refurbishment of residential, commercial or semi-commercial property

Lenders will consider proposals for both brownfield and greenfield sites, and on both a speculative and pre-sold/pre-let basis

Typical terms for this type of loan are as follows:

• Amount - minimum £100,000 - no maximum
• Loan to Value - up to 70% land cost and 70% build costs of project on standard facilities but loans of up to 100% of costs are available
• Term - up to 12 months
• Repayment - at the end of the project, from sale of property or refinancing. It is possible to roll up interest during the project term
• Interest rates - margins on variable rates are usually between 1% and 3% above the Bank of England base rate
• Lenders' Fees - an arrangement fee is payable on acceptance of the lender's formal offer. You usually have the options of either paying this amount up front or adding the amount to the loan
• Other Costs - borrowers are responsible for legal and valuation costs and the broker's fee