Ying Tan, managing director of The Buy-to-Let Business, said the wider range of criteria will help more landlords to invest in buy-to-let this year.
Paragon Mortgages launched 44 buy-to-let products and lowered its rental income requirements earlier this week.
Paragon’s previous calculation of 130% rental income cover at an interest-only rate of 7% has been cut down to 125% at 5%.
Houses in Multiple Occupation remain at an absolute minimum of 130% at 7%.
Lea Karasavvas, managing director of Prolific Mortgage Finance, said that the removal of the 0.25% loading was very encouraging and should open the doors to more business.
Tan said the reduction would mean more cases would go through which didn’t fit last year, particularly cases involving limited companies and larger portfolios of self-contained units.
He said: “Those areas were very difficult to get financing for and the financing that was available was very difficult to fit with the rental cover requirements.
“Now that the rental cover has been reduced, there will be more cases that can fit the criteria at an acceptable loan to value.
“Paragon are buy-to-let specialists who understand the market and have excellent underwriting. They understand the professional landlord which very few do. This new criteria that can only be good for the market.”
Karasavvas added: “The launch of the range is a welcome announcement from them and one that I think will make other lenders stand up and take notice.
“Placing business for limited companies in the buy-to-let sector was something of a challenge in the current climate so seeing Paragon remove their 0.25% loading is very encouraging.
“It’s really the first big of good news for the New Year and is a very good move by them.”
Paragon also launched six buy-to-let products under Mortgage Trust aimed towards amateur landlords.
