Paragon Mortgages is offering more generous buy-to-let loan sizes on its five-year fixes.
The specialist buy-to-let lender has launched a 'limited edition' 3.95% rate which is fixed until 31 October 2021.
At the end of the fixed rate period, the mortgage reverts to 4.75% over LIBOR. The overall cost of comparison is 5.10% APRC.
Aaron Strutt, product director at Trinity Financial, says: “If a property generates £1,500 rental income each month, Paragon would offer a mortgage of approximately £360,000 on its five-year deal. On its two-year fix, the mortgage would be just under £270,000.
“Many of the other lenders are not so generous, for example, Virgin Money's rental calculation is 125% of the mortgage interest calculated at a notional rate of 5.74%. This means the bank would offer a £250,871 mortgage.”
Paragon's 3.75% rate has a £1,999 arrangement fee and early repayment charges for the fixed rate period. Applicants will need a 25% deposit to qualify and the maximum loan size is £500,000.
Please note that the margin above LIBOR may be varied once the rate has finished, subject to 28 days written notice. Also, the lender says "after the initial fixed period, if the mortgage is [on] interest-only, it may be converted to capital and interest repayment, subject to 28 days written notice."
For help to secure a more generous buy-to-let mortgage, call Trinity on 020 7016 0790.