Paragon Bank has announced a 4.69 per cent five-year fixed-rate buy to let mortgage, marking the lender’s lowest rate for this type of mortgage in over 12 months.
The new product is part of a broader reduction in Paragon’s five-year fixed-rate offerings.
Available at a 70 per cent LTV, this rate is applicable for single self-contained properties with an EPC of A to C. Homes rated D or E will have a 4.74 per cent rate, while HMO and Multi-Unit Blocks are subject to a 4.94 per cent rate.
In what it calls an industry-first move, Paragon is also offering zero Early Repayment Charges during the first year of the product’s term.
A 3.0 per cent flat fee applies for early repayment during the remainder of the term. The new mortgage comes with a 7.0 per cent product fee, and the Interest Coverage Ratio is calculated at 5.5 per cent.
Paragon has additionally introduced a nil fee five-year fixed-rate mortgage starting at 6.3 per cent for single self-contained properties at 65 per cent LTV, with the ICR set at the pay rate.
Louisa Sedgwick, commercial director at Paragon Bank, says: “We’re excited to launch our new five-year fixes, especially because we know that the new 4.69 per cent rate is extremely competitive and the cheapest five-year product that we’ve launched since August last year.”
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A 7% fee is ridiculous.
🤣🤣🤣 7% arrangement fee, 🤣🤣🤣🤣🤣🤣
My mortgage guy tells me that BTL (with mortgage) has died for now. He still has people making enquiries, but when they discover they have to put a lot more than 25% into the deal to meet lender calculations they soon give up. So only for cash buyers. BTL lenders aren't going to be meeting their targets for new business.
7% fee adds 1.4% to the annual cost, so 6.44% overall for a D or E rated property, which is sadly quite competitive these days. It also helps with cashflow if you add the fees to the loan, but nobody in their right mind would pay it off in the first year, as they would lose the entire 7% fee!
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