The lender’s five-year fixed mortgage rates, which comes with a five per cent fee, has been lowered from 5.2 per cent to 4.5 per cent for the purchase or remortgage of single self-contained properties.
For properties with an EPC rating between A and C, the rate stands at 4.45 per cent while for houses in multiple occupation (HMO) and multi-unit blocks (MUBs), it stands at 4.7 per cent.
Paragon’s five-year fixed rate with no fee has fallen from 5.94 per cent to 5.39 per cent and comes with a £750 cashback. Paragon’s EPC C and higher loan is priced at 5.34 per cent and goes up to 5.59 per cent on HMOs and MUBs.
These products are available up to 75 per cent loan to value (LTV) for landlords applying via limited companies or in personal names across England, Scotland and Wales.
The firm’s reference rate has fallen from 5.5 per cent to five per cent and interest coverage ratios (ICR) are calculated in line with initial rates, except for sub-five per cent products where ICRs are calculated at five per cent.
The lender has extended its maximum loan term from 25 to 35 years, while lowering the amount of experience landlords are needed to have for HMO and MUB application from a minimum of three years to two years.
Louisa Sedgwick, commercial director at Paragon Bank, said: “It’s great to get the year off to a positive start by taking up to 70bps off our 75 per cent LTV five-year fixed-rate mortgages. With a mix of five per cent and nil fee options, some with £750 cashback, we’re aiming to offer products that work for more landlords.
“This is also a key driver in our decision to reduce our reference rate from 5.5 per cent to five per cent. We’ve listened to brokers who have told us that the most important consideration for their clients when sourcing mortgages is affordability so calculating ICRs at a lower rate will help with this.
“Additionally, we have eased some of our criteria across the maximum loan term and minimum experience for HMO and MUB applications.”
At the end of 2023, Mortgage Solutions reported that Paragon had shown profits of £278m despite a small fall in mortgage lending.
Atom Bank lowers prime and near prime resi mortgage rates
Atom Bank has lowered prime mortgage rates by up to 0.3 per cent and near prime rates by up to 0.2 per cent.
The largest reductions have been made to high LTV deals, with prime five-year fixed rates priced at 4.94 per cent at 90 per cent LTV and 5.19 per cent at 95 per cent LTV.
Its two-year fixed rate is 5.44 per cent at 90 per cent and 5.79 per cent to 95 per cent LTV.
These products have no fee, free valuation and remortgage products feature fee-assisted legals.
Richard Harrison, head of mortgages at Atom, said: “The recent statistics highlighting that lending to first-time buyers was down by a fifth in 2023 demonstrates the plight of many who are struggling to get onto the housing ladder. We know how important this sector is, so we’re delighted to be offering them further rate cuts with a slick digital experience that can reduce the hassle often associated with an application.
“Equally, we know that the pressure that has been put on household budgets means that increasing numbers of would-be borrowers are more likely to fall within the Near Prime category, so we want to continue our commitment to supporting this area of the market by cutting rates across the range.
“Having made a number of rate reductions in recent months, we remain steadfast in our commitment to ensure we offer excellent value and a simple, speedy process to help more people achieve their home buying aspirations.”
