Paragon Bank has made adjustments to its five-year fixed-rate buy to let mortgage range, signalling positive news for landlords in England, Scotland, and Wales.
The move includes rate reductions, introduction of a nil fee range, raising loan-to-value (LTV) limits, and more favourable interest coverage ratios (ICRs), all of which aim to offer greater flexibility and choice to property investors.
It is worth noting that all products from Paragon Bank’s updated mortgage range include a free valuation, with an application fee of £299.
The mortgages cater to portfolio landlords, defined as those with four or more buy to let mortgaged properties, whether applying through limited company structures or in their personal names.
5-year nil fee options
Paragon Bank has introduced a nil-fee, five-year fixed-rate product range.
For single self-contained properties (SSC) with an Energy Performance Certificate (EPC) of D or E, the rate is 6.15. Rates reduce to 6.10 for SSC properties with an EPC of A to C.
And for houses of multiple occupation (HMO) and multi-unit blocks (MUBs), the rate is at 6.35 per cent.
Paragon has also increased the LTV limit from 65 per cent to 75 per cent, on nil-fee 5 year products. The increase in maximum LTV provides landlords with increased financial leverage, potentially allowing borrowers to consider a wider range of investment properties.
For this new range, the stress rates used in the mortgage affordability calculation are closer to the initial rate borrowers would actually pay, allowing clients to borrow more.
5-year 5 per cent fee options
Paragon Bank has also reduced rates on its 5 per cent fee five-year fixed options by 10bps.
The green product within the range now starts at 5.15 per cent, the standard SSC option at 5.20 per cent, and for those purchasing or remortgaging HMOs or MUBs, rates begin at 5.40 per cent.
These products, too, are available at up to 75 per cent LTV, with ICRs calculated at 5.50 per cent.
Louisa Sedgwick, the commercial director at Paragon Bank, stated:
We’re keen to see our customers benefit from the stability that we’ve seen return to the economy, so we’re pleased to reduce rates across some of our five-year fixed-rate products. With both nil and 5% fee options available, we are also in a position to provide landlords with more choice.
Paragon Bank’s recent adjustments to its buy to let mortgages are a positive step to supporting landlords by enhancing affordability, providing greater flexibility, and adapting to the changing economic conditions.
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