Buy-to-let accounted for the majority of the business, as advances jumped 24% to £425m.
Specialist and professional landlord business made up 88% of completions, the lender said.
At the end of December, the first quarter of Paragon’s 2019 financial year, its buy-to-let lending pipeline was £729m, an increase of 18% compared with the same point last year.
In the bank’s commercial lending division, acquisitions helped deliver a 105% increase in lending to £212m – up from £103m annually.
John Heron, managing director of mortgages at Paragon (pictured) said: “The group has started the year well, delivering strong growth across all our core business lines.
“Our buy-to-let mortgage capability continues to go from strength to strength as we expand our specialist proposition to meet the needs of larger scale landlords with more complex portfolios.”
Group lending increases 40%
Overall, new lending across all business lines was up 40.6% to £660m.
The largest growth was within development finance, which increased a whopping 450% year-on-year to £79.3m, from £14.4m.
This reflected a full quarter from the Titlestone acquisition, according to Paragon.
Paragon’s deposit raising continues to form the foundation of its funding programme, with savings balances in excess of £5.6bn at the end of the three months.
The bank said market developments have resulted in some increase in costs, with the portfolio average deposit cost increasing by three basis points from September 2018 to December 2018.
Paragon added that further progress has been made refinancing the group’s securitisations with deposits, with three deals over the quarter refinanced in this manner covering £137m of loans.
Chief executive Nigel Terrington said: “The group has started the year well, delivering strong lending growth across all our core business areas.
“Our retail deposit base continues to grow, creating further efficiencies in our funding structure.
“We remain confident in the outlook, but will maintain our capital, liquidity and broader risk disciplines in case the external operating environment should deteriorate.”