Paragon Bank has recently lowered mortgage rates for landlords, offering fixed deals from 4.59%. This rate reduction applies to 22 buy-to-let mortgage products and covers various loan-to-value bands for both portfolio (four or more properties) and non-portfolio landlords. Notably, Paragon’s two-year fixed rate product at 70 percent loan-to-value is now available at 4.59%.
Portfolio landlords can access this rate when purchasing or remortgaging single self-contained properties with EPC ratings ranging from A to C. For properties falling within EPC bands D or E, the rate increases to 4.64%, while HMOs and MUBs carry a rate of 4.84%. The product fee for the two-year fixed-rate mortgages stands at 5.0%, and interest coverage ratios are calculated at two percentage points above the initial rates.
Louisa Sedgwick, Commercial Director at Paragon Bank, comments: “In this market, landlords want options, so we are pleased to offer these competitive rates with a mix of terms, LTVs, and fees. With various indicators suggesting that the UK economic outlook is strengthening and swap rates stabilizing, we’ve been able to reduce rates on some of our key products once again.”
In the conventional mortgage market, primarily dominated by major High Street banks, further rate reductions are anticipated, building upon those already declared.
Prominent institutions like Lloyds Banking Group, Barclays, Nationwide, and Santander have recently lowered borrowing rates or signaled their intention to do so in the coming days.
Nicholas Mendes, a mortgage manager at the brokerage firm John Charcol, highlights HSBC’s proactive stance, stating that they have “set a clear precedent and demonstrated their commitment” with their latest rate adjustment. He further notes, “This marks their second rate reduction in a week, accompanied by changes in criteria that extend mortgage terms to 40 years.”
Amid the rate cuts within the buy-to-let mortgage sector, landlords are now presented with a wider range of options for financing their property investments. These rate reductions are especially welcome news given the recent economic climate, where many landlords have faced challenges due to the impact of the pandemic.
One notable aspect of these rate adjustments is their varying criteria based on energy performance ratings. Paragon Bank’s approach, for instance, encourages landlords to invest in more energy-efficient properties by offering lower rates for those with higher EPC ratings. This could potentially incentivize landlords to contribute to the UK’s efforts in reducing carbon emissions from the housing sector.
Furthermore, with more mainstream lenders expected to follow suit in reducing their borrowing rates, this trend could extend the competitive landscape of the mortgage market, potentially benefitting both property investors and aspiring homeowners. As these changes continue to unfold, it will be essential for borrowers to carefully evaluate their options and stay informed about the latest developments in the mortgage industry.
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