Landlord Knowledge - Home of the Savvy Buy to Let Property Investor

Paragon Bank Announces Rate Cuts on Buy-to-Let Mortgages, Expanding Options for Landlords

In a move aimed at providing more choices for landlords, Paragon Bank has announced significant reductions in rates across its range of five-year fixed-rate buy-to-let mortgages. The changes include cuts of up to 20 basis points on various mortgage products, enhancing options for those investing in rental properties.

Key features of the revised mortgage offerings include:

  • Five-year fixed-rate mortgages now available up to 75% loan-to-value (LTV), an increase from the previous 65%.
  • Options without fees and with a 5% fee.
  • Mortgages are applicable for various property types including single self-contained (SSC) properties, houses in multiple occupation (HMO), and multi-unit blocks (MUB).

Specifically, Paragon Bank has reduced 20 basis points off its nil-fee five-year fixed-rate products. These now start at a rate of 6.10% for SSC properties with Energy Performance Certificate (EPC) ratings between A and C. Properties with EPC ratings D or E, and those classified as HMO or MUB, see incremental rate increases.

In addition, the bank has trimmed 10 basis points off its 5% fee options. These now start from 5.15% for environmentally friendly properties, 5.20% for standard SSC properties, and 5.40% for HMOs or MUBs. These options are also available at up to 75% LTV, with interest coverage ratios (ICRs) calculated at 5.50%.

Louisa Sedgwick, Commercial Director at Paragon Bank, expressed the bank’s commitment to supporting landlords in the current economic climate. She 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.”

Sedgwick also highlighted the bank’s decision to increase the LTV on their nil fee products from 65% to 75%, noting that this change is intended to offer more viable options for a broader range of landlords.

These mortgage products are accessible to portfolio landlords across England, Scotland, and Wales. They cater to those with four or more buy-to-let mortgaged properties, whether through limited company structures or in personal names.

To further sweeten the deal, all products include a free valuation and are subject to a nominal £299 application fee, marking a strategic move by Paragon Bank to solidify its position in the competitive mortgage lending market.