Paragon Bank has strengthened its buy-to-let mortgage further advance proposition, streamlining the application process and reducing the minimum loan size to £2,000 and rates by 20bps.
Following broker feedback, Paragon is migrating further advances onto its enhanced mortgage originations platform, using the same intuitive layout and streamlined journey as its other buy-to-let mortgage applications.
Where no property inspection is required, the move enables Paragon to issue offers in as little as 48 hours and means landlords can receive funds within 24 hours of the lender receiving a signed offer acceptance.
The further advance proposition will use automated valuation models alongside other data sources to reduce the requirement for in-person revaluations. Additionally, Paragon is harnessing trusted new and existing data sources to provide an indication of how much additional borrowing a landlord may be able to access.
In most cases Paragon expects to be able to provide this indication, but where it is not possible, landlords can still submit an application, which will be assessed on a case-by-case basis by its experienced underwriters.
Additionally, Paragon has taken 20bps off its range of further advance products. Rates now start at 6.25% for five-year fixed-rate mortgages, available at up to 75% loan-to-value (LTV) for single self-contained (SSC) properties. Two-year fixes are also available, with rates starting at 6.40%, and the equivalent products are available for HMOs and MUBs too, priced 20bps higher than the SSC loans.
Paragon expects further advance loans to grow in demand as home providers prepare for forthcoming changes to minimum EPC requirements for rental property. Paragon’s data shows that approximately 40% of its further advance loans are currently taken out to fund property improvement work.
Research carried out on behalf of Paragon by Pegasus Insights showed that 62% of landlords expect to carry out work to upgrade property to meet the minimum requirement of EPC C by October 2030, with 22% of those expecting to utilise external finance to fund the work, including further advances1.
Andrew Smart, Head of Mortgages Transformation at Paragon Bank, said: “We’ve moved our further advance proposition onto our enhanced origination platform, with brokers benefiting from the same ease of use, clear and easy layout and intuitive design. This makes the process simpler for brokers and their landlord clients, providing quicker release of funds where we don’t need to inspect the property.
“A substantial proportion of the further advance business we write supports home providers to improve their properties. Making this finance quicker and easier to access will be particularly beneficial for those investing to remain compliant with new regulations, such as the forthcoming changes to the PRS Minimum Energy Efficiency Standards.”
