Development Finance
- Interest rates – Between 0.6% to 1.5% per month
- Term – Traditionally between 9 to 18 months
- Exit fees – 1% (Some lenders may offer no exit fee)
- Arrangement fee – 2% (Taken out of the gross loan)
- Traditionally up to 70% lent on purchase of the property
- 100% of the build costs covered paid in monthly tranches in arrears
- Monthly QS is required with most lenders at the cost of the applicant. (This is hard to estimate and fluctuates on a cases by case basis depending on the type of development and location)
- Drawdown Fees – Some lenders will put a charge back on the applicant when they draw down the monthly tranches.
- Legal fees – Once again this is hard to gauge subject to the size of the development.
- Traditionally lenders will want to see a minimum of 30% profit in the development.