Paragon Bank has reduced rates for its five-year fixed-rate BTL mortgages by up to 70 bps, as well as lowered its reference rate and made changes to minimum experience and maximum loan term criteria.
The lender’s five-year fix with a 5% fee is now priced at 4.50% (from 5.20%) for the purchase or remortgage of single self-contained properties, and 4.70% for HMOs and MUBs.
Its five-year fixed-rate option with no fee — which comes with £750 cashback — is now available at 5.39% for single self-contained properties, and 5.59% for HMOs/MUBs.
Meanwhile, its products for energy efficient homes with an A-C EPC rating are now priced at 4.45% with a 5% fee, and 5.34% with no fee.
Following a reduction in Paragon’s reference rate from 5.50% to 5%, ICRs are calculated in line with initial rates — except for sub-5% products whereby ICRs are calculated at 5%.
In addition, the finance provider extended its maximum loan term from 25 to 35 years, and reduced the amount of experience landlords are required to have for HMO and MUB applications down to two years minimum.
Louisa Sedgwick, commercial director at Paragon Bank (pictured above), said: “It’s great to get the year off to a positive start by taking up to 70 bps off our 75% LTV five-year fixed-rate mortgages.
“With a mix of 5% and nil fee options, some with £750 cashback, we’re aiming to offer products that work for more landlords.
“This is also a key driver in our decision to reduce our reference rate from 5.50% to 5% — we’ve listened to brokers who have told us that the most important consideration for their clients when sourcing mortgages is affordability so calculating ICRs at a lower rate will help with this.
“Additionally, we have eased some of our criteria across the maximum loan term and minimum experience for HMO and MUB applications.”
