Paragon Bank has announced a significant drop in its core two-year fixed-rate buy-to-let mortgages. The rates have been reduced by 45 basis points, now commencing at a competitive 4.85%.
The new 4.85% rate is applicable to single self-contained properties that boast EPC ratings between A and C. However, properties with an EPC rated D or E will see rates at 4.90%. The Interest Coverage Ratios (ICR) are set at 6.85% and 6.90% for each rate respectively.
In addition, Paragon is introducing a two-year fixed-rate buy-to-let mortgage option for houses in multiple occupation (HMO) and multi-unit blocks (MUB). These properties will have an interest rate of 5.10% and an ICR of 7.10%.
The newly announced products come with a 5% fee and are accessible to portfolio landlords at a maximum of 70% loan-to-value. Furthermore, these mortgages cater to both individual landlords and those operating through limited company structures, covering England, Scotland, and Wales.
Louisa Sedgwick, Commercial Director at Paragon Bank, expressed her views on the recent change. “Our most recent rate reduction sees us quickly respond to the current stability of the swaps market and take 45bps off our core two-year buy-to-let fixed rate, offering our customers some very competitively priced products. These should appeal to borrowers who would like the certainty of a fixed rate product, but over a shorter two-year period.
She added, “While five-year fixes remain popular, we have seen demand grow for two-year options. This could be driven by more landlords choosing to reassess the market in two years’ time, with the recent easing of inflation increasing confidence that we are nearing the current cycle of base rate rises and the expectation that this will play through to mortgage rates during the period.”