One is a fee-free two-year fix, the other is a low-fee variable BTL option
Specialist lender Paragon Bank has introduced a fee-free two-year fixed rate buy-to-let mortgage, alongside a new two-year discounted variable rate product with a low fee.
The fixed rate product starts at 6.10% for the purchase or remortgage of single self-contained properties with energy performance certificate (EPC) ratings of ‘A’ to ‘C’. For properties with EPC ratings of ‘D’ or ‘E’, the rate is set at 6.15%, while houses in multiple occupation (HMOs) and multi-unit blocks (MUBs) have a rate of 6.35%.
Paragon’s new discounted variable rate mortgage tracks the bank’s standard variable rate (SVR) minus 3.16% for properties with EPC ratings of ‘A’ to ‘C’, and 3.11% for properties with lower EPC ratings. The mortgage comes with a 1.25% fee, with initial rates starting at 6.19% for the green option, 6.24% for the standard option, and 6.44% for HMOs and MUBs. This product is an alternative to Paragon’s existing 2.50% fee discounted variable rate option.
Borrowers using Paragon’s discounted and standard SVR products also have the option to switch to a fixed rate product during the term without incurring an early repayment charge.
These products are available up to 75% loan-to-value (LTV) and have interest coverage ratios calculated at the initial rate plus two percentage points. The offerings are open to individual and limited company applicants in England, Scotland, and Wales, and include a free mortgage valuation with a £299 application fee.
“Landlords keep a keen eye on the economy, and we know there is an anticipation that rates will continue on their current downward trajectory,” said James Harrison (pictured), mortgage product manager at Paragon Bank.
“This makes two-year products more appealing, so we’re providing more choice across the term, launching a nil-fee fixed rate option and a discounted variable rate. The latter has a lower fee than our existing 2.50% fee product and is available with track to fix. This makes it a great choice for customers who want flexibility, with the option to choose a fixed rate product within the next two years without paying an early repayment charge.”
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