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Paragon extends max BTL LTV to 80 per cent for energy efficient properties

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  • 29/03/2021
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Paragon extends max BTL LTV to 80 per cent for energy efficient properties
Paragon is increasing its maximum loan-to-value (LTV) for buy-to-let mortgage to 80 per cent for properties with the best energy efficiency ratings.

 

Paragon’s standard LTV is 75 per cent but it has introduced this range for properties with an energy performance certificate (EPC) rating of A to C to enable landlords to borrow a higher proportion of the property’s value.

The pair of five-year fixes are available for portfolio landlords for purchase and remortgage, with the single self-contained properties edition at 3.99 per cent and houses in multiple occupation (HMO) at 4.19 per cent.

Both come with no product or valuation fee, £350 cashback and with interest coverage ratios of four per cent and 4.19 per cent respectively.

Paragon noted that the number of properties in the private rental sector (PRS) with an energy rating of between A-C has increased by 272 per cent over the past decade to 1.8 million.

However, approximately six out of 10 homes remain at grades D or below.

Paragon Bank managing director of mortgages Richard Rowntree said landlords had made great strides in providing more energy efficient homes or upgrading properties over the past decade.

“However, more needs to be done as the government moves towards its net zero carbon target by 2050 and landlords have a key role to play in that,” he said.

“Our new range of products at 80 per cent LTV for homes with an energy rating of C or above will be an incentive for landlords to add energy efficient homes to the sector, benefitting tenants through lower energy bills and the environment through reduced consumption.”

“If landlords are to improve the energy efficiency of PRS stock, they need the finance to enable them to do so. Making sure there are attractive options to add new stock, while recognising the efforts to upgrade existing properties, is an important element of this.”

 

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