What types of interest rates are available?
What types of property are acceptable?
How do you calculate the maximum loan available?
What are your loan-to-value (LTV) limits?
What is your valuation and administration fee scale?
Can the arrangement fee be added to the loan even if it takes the borrowing to over the loan-to-value (LTV) limit?
Are there any age restrictions?
What are the minimum and maximum mortgage terms?
What methods of repayment are available?
What references are required?
How are payments collected and how is interest charged?
What about protecting the mortgage payments?
How can I protect my investment property and possessions?
Do you insist on life cover?
What happens if the mortgage is repaid early?
Can the terms of the mortgage be altered after completion?
Can I complete an on-line application?
What if the mortgage payments can't be met?
Where can I find more information?
What types of interest rates are available?
We may offer the following types of interest rate:
Tracker/Variable Rate Mortgages
These follow a specific reference rate, such as 3 month Libor or the Bank of England's Base Rate. Interest is charged at an agreed margin above the reference rate. This can mean lower payments if interest rates fall, but if rates rise your payments will do the same.
Fixed Rates
A fixed rate mortgage offers you peace of mind, as the interest rate you are charged stays the same for a set period of time. The mortgage reverts to a variable rate once the fixed rate period comes to an end.
Discounts
Discount mortgages offer you the opportunity to pay a discounted interest rate, below an agreed variable rate, for a set period of time. The mortgage reverts to the full variable rate once the discount period comes to an end.
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What types of property are acceptable?
We will consider applications on traditionally constructed residential property (brick/stone with a slate roof) in mainland England, Scotland or Wales. Properties must have a minimum value of £50,000.00.
Freehold flats or maisonettes in England and Wales are not acceptable.
To help us confirm a property's suitability for further lending purposes a valuation will be undertaken by an approved surveyor and fees may apply.
For more comprehensive details, please refer to our Further Advance Lending Guidelines
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How do you calculate the maximum loan available?
The minimum income required is £25,000. All applications will be subject to a joint assessment of the minimum income being achieved and the gross rental income from the property. This should equal or exceed 125% of the interest only payment of the loan, calculated at either the Paragon Group Reference Rate or the Product Pay Rate, whichever is applicable to the chosen product. The Paragon Group Reference Rate is reviewed regularly.
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What are your loan-to-value (LTV) limits?
For Further Advances, our minimum loan is £2,500, and our maximum per property is £2,000,000.
The maximum advance (aggregate or original loan plus further advance(s)) available is as follows:
Further Advance Maximum Advances
(Aggregate of original loan plus further advance(s)) |
For the purpose of :-
- Undertaking repairs, improvements, and refurbishments to residential investment properties mortgaged to the Paragon Group. |
75% LTV |
Maximum £500,000 |
| 70% LTV |
Maximum £1,000,000 |
| 65% LTV |
Maximum £2,000,000 |
For the purpose of :-
- Undertaking repairs, improvements, and refurbishments to residential investment properties NOT mortgaged to the Paragon Group.
- Deposits or the full purchase price for residential investment property purchases where NOT mortgaged to the Paragon Group
|
70% LTV |
Maximum £500,000 |
| 65% LTV |
Maximum £1,000,000 |
| 60% LTV |
Maximum £2,000,000 |
If you are unsure of your LTV and would like us to consider a further advance then please call 0845 849 4040 to discuss.
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What is your valuation and administration fee scale?
Fees relating to our current product range are detailed in the following tables:
| FURTHER ADVANCE FEES |
| Arrangement Fee |
Usually added to loan upon completion |
Product specific |
| Revaluation Fee |
Non refundable, payable upon application |
£130 |
| Revised Document Fee |
Payable for the re-issue of an offer of loan, due to change of product. Fee deducted from the loan at completion |
£50 |
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Can the arrangement fee be added to the loan even if it takes the borrowing to over the loan-to-value (LTV) limit?
Yes. The LTV limits are calculated on the amount being borrowed and any fees added to the loan are excluded from this calculation.
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Are there any age restrictions?
Applicants must be 21 or over. Your loan should normally be repaid by retirement age, unless evidence of how you will pay the loan beyond this age can be provided.
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What are the minimum and maximum mortgage terms?
A minimum of 5 years to a maximum of 25 years, subject to your age at the time of application.
The maximum term for a further advance will be to the end date of the main loan.
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What methods of repayment are available?
We offer two repayment methods, capital repayment and interest only:
Capital repayment
Monthly payments consist of both interest and capital. The outstanding balance is gradually reduced over the term of the loan.
Interest only
You only pay the interest element of the loan. At the end of the mortgage term the full amount originally borrowed will still be owed.
It is possible to combine these two methods and have a part interest and part repayment mortgage. The mortgage is divided into two parts and your single monthly payment will be made up of part interest only and part capital repayment.
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What references are required?
In order to assess an application, we may require some or all of the following:
A clear credit history - this will be checked by credit search
- Latest payslips/P60
- Latest tax returns or tax return acknowledgement (SA302)
- The last two sets of accounts
- Proof of 12 months' current mortgage payments (if they cannot be located on the credit search)
- Personal bank statements
For more comprehensive details, please refer to our Further Advance Lending Guidelines
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How are payments collected and how is interest charged?
We only accept payments by direct debit and these are collected from your bank account towards the end of each month. The loan balance on which we charge interest is recalculated on a quarterly basis.
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What about protecting the mortgage payments?
It is advisable to consult an independent financial adviser about how you might repay your mortgage should you be made redundant or find yourself unable to work through sickness or accident.
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How can I protect my investment property and possessions?
Redbrick Landlords Insurance, a member of the Paragon Group of Companies, offers a range of specialist landlord insurance products. Full details and a personal quotation are available by calling the Redbrick Insurance Specialists on 0845 849 4047.
Please note that it is a requirement of the mortgage for you to ensure that the mortgaged property has suitable buildings insurance to cover all major risks. Should you choose to arrange your own insurance, through another provider, a one off fee will be charged to cover administration costs.
For more details, please refer to the Insurances for Landlords section of the website.
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Do you insist on life cover?
It is good practice to make provisions for the repayment of the loan upon maturity or in the event of death during the term. However, we do not ask for a life policy or investments to be assigned to the mortgage.
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What happens if the mortgage is repaid early?
Redemption charges may be applied depending on the terms and conditions of your mortgage. The amount charged and the period over which any charge remains depends on the type of mortgage you have.
Clear details of these charges can be found in your mortgage offer. For our current product range they can be found on the product sheet (available in our Literature Library).
To confirm your redemption charges and costs please contact us on 0845 849 4060.
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Can the terms of the mortgage be altered after completion?
We will always try to accommodate a request to change mortgage terms, but this is at the discretion of the company and an administration fee may be charged. Customers wishing to alter terms will normally be able to select products from our current range. For full details of our current product range please consult your financial advisor, visit the product section of the website or call us on 0845 849 4040.
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Can I complete an on-line application form?
Unfortunately, we do not currently have the facility for completing an application on-line but you can download our PDF application form from either our Literature Library or the Application Area of the site.
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What if the mortgage payments can't be met?
A mortgage is usually your largest and most important financial commitment. A change in your personal circumstances may have adverse financial consequences. If you think that you might experience problems meeting your regular payment it is vital that you contact us on 0845 849 4080 as soon as possible. We will discuss the options available to you, as well as possible solutions.
You can obtain independent advice free of charge from any of the following:
Citizens Advice
Consumer Credit Counselling
National Debtline
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Where can I find more information?
Within our Literature Library you will find the latest information on our buy-to-let mortgage products and the Further Advance Lending Guidelines. There are also a number of other documents which you may find useful, including guides on tax, Energy Performance Certificates and Houses in Multiple Occupation. Alternatively call us on 0845 849 4040.
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