Yesterday’s inflation rate climbed from 2.0% to 2.2%, which may have dampened hopes for a Bank of England base rate cut in September. The rise in inflation suggests that a reduction in the base rate might be less likely in the near term, potentially impacting borrowing costs for many.
Despite this, lenders are still moving to lower their rates to attract landlords. Paragon Bank, for instance, has revised its buy-to-let mortgage range, cutting rates by up to 20 basis points on 20 different products. This move aims to entice landlords with more competitive rates, even as broader economic conditions remain uncertain.
The newly updated mortgage range from Paragon Bank offers options with up to 75% loan-to-value (LTV). This range includes fixed-rate products with interest rates of 3.00%, 5.00%, as well as options with a £2,995 fee or no fee at all. These products are available in both two-year and five-year fixed terms.
For those interested in a shorter-term solution, rates start at 4.60% for a two-year fixed-rate mortgage. This option is suitable for both purchasing and remortgaging properties with an EPC rating of A-C. The Interest Coverage Ratios (ICRs) for these products are calculated at the initial rate plus two percentage points.
The five-year fixed-rate mortgages are now available starting at 5.45% for properties with an EPC rating of A-C. For homes with lower energy efficiency ratings of EPC D or E, the rate increases by 5 basis points. The £2,995 fee option is offered up to 75% LTV, an increase from the previous limit of 65%. This option is suitable for purchasing or remortgaging houses in multiple occupation (HMO) and multi-unit blocks (MUB). Additionally, a 5.00% product is available with a rate fixed at 4.74% over five years.
The Interest Coverage Ratios (ICRs) for these five-year fixed-rate mortgages are calculated at 5.00% for products with a 5.00% fee, and align with the initial rates on the £2,995 and no-fee options.Â
These mortgage products are open to individual and limited company applications in England, Scotland, and Wales and include a free mortgage valuation.
Paragon Bank’s mortgages managing director, Louisa Sedgwick, has announced a significant update to their mortgage range. She highlighted that the improving economic conditions have allowed the bank to make a positive change by reducing rates on 20 products by up to 20 basis points. This adjustment is part of a broader effort to refresh their offerings and align with current market trends.
Sedgwick explained that the refreshed range includes a variety of options for borrowers. They can choose from deals with no product fees, percentage-based fees, or a flat fee of £2,995. This variety is designed to cater to different needs and preferences, offering more flexibility in mortgage arrangements.
One notable option in the updated range is the £2,995 fee product, which stands out due to its lack of a maximum loan cap. This means it is available for loans up to £4 million, including properties classified as Specialist Student Accommodation (SSC), Houses in Multiple Occupation (HMO), and Multi-Unit Blocks (MUB). This makes it an attractive choice for those seeking larger loans.
Additionally, Sedgwick pointed out that the loan-to-value (LTV) ratio has been increased to 75%, up from the previous 65%. This change further enhances the appeal of the £2,995 fee product, making it a suitable option for a broader range of landlords.
Overall, Sedgwick believes these changes provide appealing options for landlords. The updated products are expected to attract more interest due to the enhanced LTV ratio and the variety of fee structures available, which cater to different borrowing needs and financial situations.
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