Paragon Bank has announced a 4.69% 5-year fixed-rate buy-to-let mortgage, marking the institution’s lowest rate for this type of mortgage in over 12 months. The new product is part of a broader reduction in Paragon’s 5-year fixed-rate offerings.
Available at a 70% loan-to-value (LTV) ratio, this rate is applicable for single self-contained properties that have Energy Performance Certificate (EPC) Ratings between A and C. The rates are adjusted for properties with lower EPC ratings; homes rated D or E will have a 4.74% rate, while Houses in Multiple Occupation (HMO) and Multi-Unit Blocks (MUBs) are subject to a 4.94% rate.
In an industry-first move, Paragon is also offering zero Early Repayment Charges (ERCs) during the first year of the product’s term. A 3% flat fee applies for early repayment during the remainder of the term. The new mortgage comes with a 7% product fee, and the Interest Coverage Ratio (ICR) is calculated at 5.5%.
Expanding the options available to landlords, Paragon has additionally introduced a nil fee 5-year fixed-rate mortgage starting at a 6.30% rate for single self-contained properties at 65% LTV, with the ICR set at the pay rate.
Louisa Sedgwick (pictured), commercial director at Paragon Bank, commented on the launch: “We’re excited to launch our new 5-year fixes, especially because we know that the new 4.69% rate is extremely competitive and the cheapest 5-year product that we’ve launched since August last year.
“We’re also pleased to bring an industry first through zero ERCs in the first year of the product to add an element of flexibility to the certainty of fixing at a market-leading rate.”
She added: “Brokers have told us that they’re trying different approaches to find solutions for their clients. One of the best ways we can support landlords in the current dynamic market is by offering choice, including a range of rate and fee options, and we feel that our latest products certainly do that.”
Last week, Paragon also lowered rates across its range of 5-year, 5% fee buy-to-let mortgages by 30 basis points. These products feature lower ERCs of 2% in the first year, 4% in years two to four, and 3% in year five. They also include a free valuation and are available for portfolio landlords, whether applying individually or via limited companies in England, Scotland, and Wales.
