Paragon launches BTL remortgage range
Paragon Bank has enhanced its portfolio product range with the launch of two remortgage-only buy-to-let (BTL) products.
Both products come with £500 cashback and a free mortgage valuation, and are available to landlords remortgaging in their personal names or through a limited company.
The first is suited to portfolio landlords looking to remortgage at up to 75% loan-to-value (LTV) on single self-contained properties; it has a rate of 3.45% is fixed for five years, with an APRC of 4.20% and a product fee of 1.50%.
The second, also offered at 75% LTV, is available on HMOs and multi-unit blocks (MUBs) at a rate of 3.65% fixed for five years; the product fee is set at 2.00% and the APRC is 4.30%.
Early redemption charges (ERC) of 5% are in place during years one and two, charged at 4% for years three and four and 3% for year five.
Paragon’s research has revealed that the proportion of BTL remortgage business is expected to grow during 2021, as buy-to-let mortgage brokers will switch their attention to the remortgage of 5-year after the stamp duty holiday ends.
Half (50%) of brokers that deal in buy-to-let said that they will focus on 5-year remortgage business at that time.
The number of 5-year fixed-rate BTL mortgages increased significantly in the run-up to the introduction of the buy-to-let stamp duty surcharge in April 2016.
Industry data shows that the number of 5-year fixed BTLs completed in the six months to the end of March 2016 was 121% higher than the same period in 2015.
Moray Hulme, director for mortgage sales at Paragon, said: “The introduction of a 3% buy-to-let stamp duty surcharge in April 2016 lead to a marked increase in landlords choosing 5-year fixed rate mortgages.
“Research we have carried out confirmed our expectation that a significant number of brokers will be looking to support landlords who are in the process of remortgaging now that those 5-year mortgages are reaching maturity.
“The launch of our two remortgage products is a timely and useful addition to our range for brokers who are targeting this business.”