Paragon Bank has cut rates on five-year fixed-rate buy-to-let mortgages by up to 70 basis points, lowered its reference rate and made changes to minimum and maximum loan term criteria.  

The specialist landlord lender says its five-year fixes have been reduced to 4.50% from 5.20% for purchase or remortgage single self-contained properties, which come with a 5% fee.  

For homes with an energy performance certificate rating of A to C, the rate is 5bps lower at 4.45%, while houses in multiple occupation and multi-unit blocks can be mortgaged at 4.70%.  

The firm adds that following a cut in its reference rate, to 5.00% from 5.50%, interest coverage ratios are calculated in line with initial rates, except for sub-5% products, where interest coverage ratios are calculated at 5.00%.  

It has also extended its maximum loan term from 25 to 35 years, while reducing the amount of experience BTL landlords need for houses in multiple occupation and multi-unit block applications, down from a minimum of three years to two.  

The business says other rate cuts include a 55bps reduction, to 5.39% from 5.94%, on a five-year no-fee product fix, which comes with £750 cashback.   

Paragon’s energy performance certificate rating of C and above loan is 5bps lower at 5.34% and increases to 5.59% on houses in multiple occupation and multi-unit blocks.

It adds these products are available at up to 75% loan-to-value for landlords applying through limited company structures or in personal name in England, Scotland and Wales.  

Paragon Bank commercial director Louisa Sedgwick says: “It’s great to get the year off to a positive start by taking up to 70bps off our 75% LTV five-year fixed-rate mortgages.   

“With a mix of 5% 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 5.50% to 5.00%. We’ve listened to brokers who have told us that the most important consideration for their clients when sourcing mortgages is affordability so calculating interest coverage ratios 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 houses in multiple occupation and multi-unit block applications.”