Paragon Bank has reduced its core two-year fixed rate buy-to-let (BTL) mortgages by 45 basis points, with rates now starting at 4.85%.

Rates on the lender’s two-year fixes are priced at 4.85% for single self-contained properties with Energy Performance Certificate (EPC) ratings of A to C, and 4.90% where the EPC is rated D or E. Interest coverage ratios (ICR) are calculated at 6.85% and 6.90% respectively.

Paragon is also offering a two-year fixed rate BTL mortgage for houses in multiple occupation (HMO) and multi-unit blocks (MUB), with interest charged at 5.10% and ICR calculated at 7.10%.

The products incur a 5% fee and are available to portfolio landlords at up to 70% loan-to-value. Furthermore, Paragon suggested the mortgages are suitable for landlords applying as individuals or through limited company structures in England, Scotland and Wales.

Commercial director at Paragon, Louisa Sedgwick, said: “Our most recent rate reduction sees us quickly respond to the current stability of the swaps market and take 45bps off our core two-year BTL fixed rate, offering our customers some very competitively priced products. These should appeal to borrowers who would like the certainty of a fixed rate product, but over a shorter two-year period.

“While five-year fixes remain popular, we have seen demand grow for two-year options. This could be driven by more landlords choosing to reassess the market in two years’ time, with the recent easing of inflation increasing confidence that we are nearing the current cycle of base rate rises and the expectation that this will play through to mortgage rates during the period.”

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