Dragonfly launches 2-year B2L product at 6.99% with option to pay just 4.99% by deferring interest

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Short- and medium-term lender, Dragonfly Property Finance, part of the Octopus group, today announced it has added to its buy-to-let range, launching a 2-year product charging 6.99%pa. Importantly, borrowers can choose to defer 2% of the interest payable, creating an effective pay rate of just 4.99%pa.

The arrangement fee on the new 2-year buy-to-let product remains at 2.5%, the minimum loan size is £50,000, the maximum £1.5m, and the rental coverage 100% at the chosen pay rate. A 3% ERC applies for the fixed rate period but not in the final three months of the loan term. If borrowers choose to pay 4.99%pa, the 2% deferred interest is payable upon redemption.

The product launches at a time when landlords are finding it increasingly difficult to finance buy-to-let projects through mainstream lenders due to the shifting regulatory landscape and enhanced stress-testing. This is especially the case with larger, bespoke loans and ‘non-standard’ borrowers with unconventional circumstances or requirements, e.g.

  • Semi-commercial properties
  • 100% rental calculation
  • Company-structured applications (including on- and offshore entities and trusts)
  • No minimum background income
  • Rental shortfalls
  • Houses of Multiple Occupancy (HMOs)
  • First-time landlords
  • Maximum age beyond typical retirement
  • Unusual property types

D’mitri Zaprzala, Head of Sales, Dragonfly Property Finance, commented:

“Securing a buy-to-let mortgage from a high street lender is becoming harder by the day, especially for non-standard landlords. But this is a lending gap we are more than happy to fill. At Dragonfly, we pride ourselves on being able to take a view on individual borrowers, however unusual their circumstances or requirements. We don’t box tick but look at each application on its merit and make a decision based on that. At a time when mainstream lenders are tightening their buy-to-let criteria, we are open for business and this latest product launch will hopefully make that very clear to brokers.”