What Rates to Expect From Development Finance
Property development finance rates are different from those you might anticipate from a residential or commercial mortgage - but it is always helpful to know what you should expect!
The interest rates offered depend on the development finance you need and your eligibility circumstances that dictate how competitive a lender can be.
You might have been offered rates that seem non-competitive or have been rejected for a development finance application and want to review your options.
Likewise, we'd recommend seeking professional advice before proceeding with any development finance loan since a more competitive deal is almost always achievable with support from an experienced broker to negotiate costs and terms on your behalf!
In this case, the best option is to contact the Revolution Finance team on 0330 304 3040 or drop us a message at [email protected] so we can steer you down the best route.
What are the Average Rates on Development Finance Property?
In most cases, you'll find that the rates offered on development finance are higher than you'd expect on a residential mortgage. However, funding is released in stages, and you only pay interest on your borrowings drawn down.
Therefore, while the interest percentage itself might be more than you'd pay for a typical mortgage, you reduce your interest expenses by only paying against the proportion of the development finance facility you've used thus far.
Most development finance loans are short term, running from three months to three years, and are on an interest-only basis.
Given the short-term nature of the loan, you must have an exit strategy, setting out your plans to refinance or sell the development and pay back the financing when the project is complete.
Funds are released in tranches depending on the development project stage, with a site inspection usually required at each stage to confirm the progress made.
