Buy to let lenders widen landlord options

Paragon Bank, ModaMortgages and Darlington Building Society have announced changes to their buy to let ranges, covering tracker mortgages, upfront fees and application requirements.

Paragon has expanded its Bank Base Rate (BBR) tracker range by introducing switch and further advance products for existing customers.

The switch range is available at up to 80% loan-to-value, while further advances are offered at up to 75% LTV.

Both options cover single self-contained properties, houses in multiple occupation and multi-unit blocks.

HMOs and multi-blocks

At 75% LTV, rates for single properties start at 5.10%, set at BBR plus 1.35%, with a 1.50% fee.

A lower 0.75% fee option is available from 5.47%, equivalent to BBR plus 1.72%.

For HMOs and multi-unit blocks, rates begin at 5.45%, or BBR plus 1.70%, with a 1.50% fee.

The 0.75% fee alternative starts at 5.82%, set at BBR plus 2.07%.

Paragon’s 12-month tracker

Paragon has also introduced a 12-month tracker at 80% LTV for switch applications, with no product fee.

The remaining products have two-year tracker terms and carry early repayment charges of 2% during the first year and 1% in the second.

The bank’s mortgages product manager, James Harrison, said: “Since launching our Bank Base Rate tracker range, we’ve seen strong engagement from brokers and their landlord clients.

“By introducing switch and further advance options, we’re enabling existing customers to access this tracker product when reviewing their borrowing or raising additional funds.”

Moda’s application fee dropped

Meanwhile, ModaMortgages has removed the application fee from its limited-edition two- and five-year fixed-rate buy to let products.

The change follows rate reductions across the lender’s range, with two-year fixes starting at 3.34% and five-year products from 4.94%.

Free valuations remain available across ModaMortgages’ full BTL range, including products for HMOs and multi-unit freehold blocks.

Mortgages are available to individual landlords and limited companies at up to 80% LTV.

Becki Fraser-Tucker, the head of sales at Chetwood Bank for ModaMortgages, said: “We’re always pushing to make our buy to let range work harder for brokers, and scrapping the application fee is a big move.

“We already knew the range stacked up, but this takes it to another level.”

Darlington removes income evidence need

Darlington Building Society has separately reduced the income evidence required for some buy to let applications following feedback from mortgage brokers.

Where an application meets the society’s required Interest Cover Ratio, applicants will no longer need to provide income evidence as standard.

The change applies across Darlington’s buy to let range, including expat cases involving self-employed applicants, where accounts previously had to be verified.

Underwriters may still ask for additional documentation where they consider it necessary, including applications involving top-slicing or more complex circumstances.

BTL rates lowered

Darlington has also reduced rates by 0.10 percentage points across its specialist residential Visa and Foreign National mortgage ranges.

Its two- and five-year fixed-rate Visa and Foreign National products at 90% LTV are now available at 5.89%, with a £999 fee that can be added to the mortgage.

The lender’s head of mortgage distribution, Chris Blewitt, said: “These changes are a direct result of conversations we’ve had with brokers who felt there was an opportunity to remove some unnecessary friction from the application process.

“For many buy to let cases, particularly where the rental income already supports the lending through our Interest Cover Ratio requirements, requesting additional income evidence was creating work without necessarily adding value to the assessment.”

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