Popular Buy To Let mortgage lender is latest to cut rates

Paragon Bank has reduced rates on its core range of buy-to-let mortgages, taking 15bps off 10 products, in addition to launching six new five-year fixed rate mortgages with nil fee and 5% fee options. 

Paragon has launched three 5% fee five-year fixed rate mortgages with rates starting at 4.60% for the purchase or remortgage of properties with EPC ratings of A-C. This increases to 4.65% on Paragon’s standard product, for homes with EPC ratings of D or E, and 4.80% for HMO or multi-unit blocks (MUB).

Rates on the corresponding nil fee products are set at 5.65% for the EPC A-C product, 5.70% on the standard mortgage and 5.90% when purchasing or remortgaging HMOs and MUBs.

These products are available at up to 65% loan-to-value and are subject to a £750 application fee, with £750 cashback on completion.

Interest coverage ratios are calculated at 5.00% for the 5% fee products and in line with initial rates on the nil fee options.

Louisa Sedgwick, Mortgages Commercial Director at Paragon Bank, says: “We’re reducing rates across our core range, as well as introducing some flexible new five-year options to offer landlords more choice. In addition to this rate cut, on products where a £750 application fee is charged, rates are lower compared to our core range.”

This ends a week of rate cuts aimed at wooing the buy-to-let investor.

Accord says new buy to let borrowers will now benefit from reduced two-year fixed rates, ranging from 0.05% to 0.40%. Three-year fixed rates will also be reducing by 0.10% to 0.20% and Accord’s two-year tracker rates will be reduced by 0.05%. All the reductions apply across the lender’s new business BTL range, with the exception of its 80% loan-to-value products.

And LendInvest Mortgages has followed up last month’s rate cuts with further reductions on selected five-year rates by up to 0.10%, with rates now starting at 4.99%.

Meanwhile West One’s latest rate changes mean its buy to let range starts at 3.09% and caters for a range of borrowers, including first-time landlords, those with impaired credit, and portfolio landlords wanting to borrow up to £10.5m. The BTL range also offers solutions for HMOs, multi-unit freehold block (MUFB), holiday let, ex-local authority, let-to-buy and expat borrowers.

Buy to Let by Foundation - the buy to let brand of Foundation Home Loans - has launched a new five-year, fixed-rate Limited Edition product. Available within its F1 tier for clients with an ‘almost clean’ credit history, the new product is available up to 75% LTV with a rate of 5.59%, and a 2.25% fee.

Finally The Mortgage Works has today cut rates by up to 0.30% across selected BTL products for both new and existing customers.

For new business, the revised rates include a two-year fixed rate for BTL purchase and remortgage at 3.69% with a 3% fee, available up to 65% LTV, reduced by 0.10%.There's also a five-year fixed rate for BTL purchase and remortgage at 4.04% with a 3% fee, available up to 65% LTV, also reduced by 0.10%. 

The Mortgage Works' five-year fixed switcher rate at 4.14% with a 3% fee, will see a reduction of 0.10% and is available for BTL purchase up to 75% LTV. As part of these changes, the lender’s new business rates for limited companies have also been reduced. These include a two-year fixed rate for buy-to-let purchase and remortgage at 4.99% with a 3% fee, available up to 75% LTV, cut by 0.30%. 

Mark Harris, chief executive of mortgage broker SPF Private Clients, says: “With the big five lenders – Barclays, HSBC, Santander, Halifax and NatWest – reducing their mortgage rates this week, lenders continue to jostle for business as they ramp up the summer sales. Those lenders who haven’t yet repriced are likely to follow suit, as long as service levels allow.

“Even though Swap rates, which underpin the pricing of fixed-rate mortgages, are not showing a consistent downwards trend, the need to generate more business seems to be motivating lenders to tweak their rates.

“It’s good news for borrowers, many of whom are struggling with affordability after successive rate rises and then holds. Expectations of a rate reduction in August are high."