Available for buy-to-let property purchases and remortgages, Paragon has launched a range of fixed-rate products, offering deals for either two or five years.
The two-year products include a fixed rate of 3.25% for lending of up to 65% LTV and another of 3.40% for lending up to 75% LTV.
The five-year product has a rate of 3.75% for landlords borrowing up to 75% LTV. This longer term fixed rate product also features interest coverage ratios that start at 125% at 4% and are graduated to reflect each landlord’s individual tax status.
An application fee of £150 and a valuation fee apply to all products and there is also a product fee starting at £995 or 1.5% of the amount borrowed, depending on the product.
John Heron (pictured), managing director at Paragon, said: “The first quarter is an extremely busy time in the buy-to-let market as landlords review their portfolios and plan for the year ahead. The tax changes being introduced in April make it more important than ever for landlords to think ahead and minimise costs where possible.”
However, it seems the changes have also pushed other lenders into cutting back their product ranges. Moneyfacts has reported that the number of buy to let deals available in January 2017 is 1,408 – down by 74 on the previous month. This is the largest monthly fall in almost eight years.
Charlotte Nelson, finance expert at Moneyfacts, explained: “The BTL mortgage market took a hit last month, seeing the largest reduction in product numbers since March 2009.”
She added: “With tougher affordability rules having come into play on 1 January and more changes due in September it is no wonder the BTL market has taken a hit. With the new rules reducing the amounts landlords will be able to borrow, it is little wonder that the 75% loan-to-value sector has seen the largest reduction in product numbers, falling from 606 to 540 in just one month.”
Nelson believed that lenders were perhaps withdrawing products to get back to their core ranges, in a bid to wait and see what others would do in the run-up to April.