Paragon introduces five-year fixed with reduced reference rate

The mortgage is available at 70% LTV and is suitable for portfolio landlords

Paragon introduces five-year fixed with reduced reference rate

Paragon Bank has launched a five-year fixed rate buy-to-let mortgage with an interest cover ratio (ICR) calculation rate that has been reduced from 7.00% to 5.75%.

The mortgage is available at 70% loan-to-value (LTV) with an initial rate priced at 5.69%. The product is subject to a 2% product fee and features a free mortgage valuation.

The specialist buy-to-let lender said the product was available in England, Wales, and Scotland and was suitable for portfolio landlords – those with four or more mortgaged properties – purchasing or remortgaging houses in multiple occupation (HMO), multi-unit blocks (MUB) and single self-contained (SSC) properties.

Read more: Paragon adds fixed rates to buy-to-let product range.

“With a level of stability returning to the market, we’re pleased to be able to offer a five-year fixed rate product that features a market-leading initial rate,” said Moray Hulme (pictured), director for mortgage sales at Paragon. “We feel this will really appeal to those landlords who seek the certainty provided by fixed rates and should sit well alongside our discounted variable products, giving investors some choice.

“Listening to brokers, we know that landlords have still been keen to stay active in the market, particularly as tenant demand remains strong, so to help facilitate this, we have reduced the rate at which we calculate ICRs from 7.00% to 5.75%.”

Early repayment charges (ERCs) of 5% are payable in years one and two, 4% during years three and four, and 3% in year five. Annual percentage rate of charge (APRC) is 6.20% and reversion rate is 5.85% – Paragon’s standard variable rate less 1.25%.