Paragon Bank has announced the introduction of a £750 cashback offer on all its five-year fixed-rate buy-to-let mortgages, alongside a new 3% fee option. This move is aimed at providing landlords with greater flexibility in managing their mortgage costs, especially as the market sees a reduction in interest rates.
New cashback and fee options for landlords
In a bid to support landlords seeking fixed-rate buy-to-let mortgages, Paragon Bank has introduced a £750 cashback for both purchase and remortgage products, available across its five-year fixed-rate range. Additionally, the lender has expanded its options with the introduction of a 3% fee product, offering rates that start at 5.14% for properties with an Energy Performance Certificate (EPC) rating of A-C. For Houses in Multiple Occupation (HMOs) and Multi-Unit Blocks (MUBs), the rate increases to 5.39%.
The new fee structure gives landlords more choice, as Paragon Bank now offers a 3%, 5%, and nil fee option, with loan-to-value (LTV) ratios of up to 75%. This provides a tailored approach depending on the landlord’s financial needs and the type of property being mortgaged.
Helping landlords with upfront costs
James Harrison, Mortgages Product Manager at Paragon Bank, explained the reasoning behind the new cashback offer and fee options: “After listening to brokers, we’ve introduced £750 cashback to our purchase and remortgage five-year fixes, helping to offset application or legal fees. We’re also responding to changes in the market – as interest rates have started to reduce, products with lower fees have become more popular.”
With the addition of the cashback offer, Paragon is aiming to ease some of the upfront costs associated with applying for a mortgage, which can be a barrier for landlords, especially in the current economic climate. By offering a 3% fee product, the bank is providing a middle-ground option that balances affordability with flexibility, while still giving landlords the opportunity to lock in fixed rates.
More choices for landlords across the UK
Paragon’s new five-year fixed-rate buy-to-let products are available for individual and limited company applications in England, Scotland, and Wales, with a free mortgage valuation included. These products are designed to meet the needs of a broad range of landlords, from those managing individual properties to those with more complex portfolios such as HMOs or MUBs.
The Interest Coverage Ratios (ICRs) for these mortgages are calculated at the product rate, ensuring that landlords can easily assess affordability and plan their investments accordingly.
For landlords looking to secure a mortgage in a market where interest rates are shifting, Paragon’s expanded product offering provides both competitive rates and practical financial support.
A step towards flexibility for property investors
With this new range of options, Paragon Bank is positioning itself as a competitive player in the buy-to-let mortgage market, catering to the diverse needs of landlords across the UK. As interest rates begin to stabilise, the addition of cashback and varied fee structures could help landlords manage their cash flow more effectively while securing a fixed rate on their investment properties.
This announcement underscores the importance of flexibility in today’s market, where landlords are seeking not just low rates but also additional support to cover costs. Paragon’s proactive response to broker feedback and market changes highlights the bank’s commitment to meeting the evolving needs of property investors.
