Paragon Mortgages launches fixed-rate range

Paragon Mortgages launches fixed-rate range

Paragon Mortgages has launched a fixed-rate range of mortgages for both buy-to-let and remortgages.

According to John Heron, managing director of Paragon Mortgages, the products, which include two- and five-year fixed-rate mortgages, help clients benefit from current low market rates.

He said the new five-year fixed rate products would be of particular interest to landlords looking for payment stability over the long-term, offering 3.75 per cent for landlords borrowing up to 75 per cent loan to value.

These longer term fixed rate products also feature interest coverage ratios, which start at 125 per cent at 4 per cent, and are graduated to reflect each landlord’s individual tax status.

Other highlights within the range include a two year fix at 3.25 per cent for lending up to 65 per cent LTV and another at 3.40 per cent for lending up to 75 per cent LTV.

Mr Heron 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."

In 2015, the then chancellor George Osborne made changes to stamp duty land tax (SDLT). Previously SDLT for commercial property transactions was charged on the old-fashioned “slab” basis rather than the marginal basis brought in for residential property in December 2014.

But the chancellor announced from 17 April 2016 commercial property would be brought into line with the SDLT and thresholds for non-residential rates, with various bands. This increases the amount of tax many landlords will have to pay.

Mr Heron added: "These products offer landlords the opportunity to put in place longer-term mortgage finance, while taking advantage of the beneficial impact of today’s record low market rates."

The launch of long-term mortgage finance products from Paragon came as adviser Key Partnerships warned that older people wanting a mortgage are facing a 'freeze' in the housing market as lenders impose restrictions on people aged 55 and above.

According to equity release specialist Key Partnerships, its referral service is receiving high levels of interest from estate agents whose older clients are finding it harder to get mortgages.

Will Hale, director at Key Partnerships, said: "Experience on the ground is that [getting mortgages for people aged 55 and over] is still a major problem.

"The views of estate agents highlight how making it difficult for over-55s to borrow has a chilling effect on the housing market as a whole."

According to Mr Hale, older homeowners typically face shortfalls when looking for their perfect last move due the premium prices that many properties for older buyers, for example bungalows, attract. While they may not need a significant mortgage, many are excluded by harsher lending criteria but are unaware that equity release could provide a solution.