Coventry for Intermediaries has reduced the rates on a selection of its two-year fixed products, and Paragon ups its interest cover ratios (ICR) for buy to let landlords, from 125% to 140%.
Coventry for Intermediaries has launched a two-year fixed rate mortgage at 1.29%(3.9% APRC).
The lender’s new reduced rates are available on its two-year fixed rate buy to let and residential products from 50% to 90% LTV.
Its residential rage includes a 1.29%(3.9% APRC) two-year fixed rate mortgage at 50% LTV, which carries a £999 product fee and early repayment charges (ERCs) until 31.03.2019.
In its buy to let range there is a 1.79%(4.4% APR) two-year fixed rate 65% LTV deal, which also carries ERCs until 31.01.2019 and a £1,999 product fee.
The current level of 125% will remain unchanged for corporate landlords and landlords paying the basic rate of income tax.
As for the lender’s affordability calculations, Paragon will use a stress rate of 2% above product rate or 5.5% (whichever is higher) for all products other than longer term fixed rates.
For longer term fixes, the current stress rate is 4% or product rate, if higher.
John Heron, director of mortgages for Paragon said:
“Government policy towards the private rented sector will increase costs for landlords and it is clear that this will need to be reflected in lender affordability assessments.
“The PRA’s supervisory statement released in September this year is helpful in ensuring that lenders approach this in a consistent fashion.
“The changes that we’re announcing today are designed to tailor affordability to each landlord’s individual circumstances, whilst keeping the application process straightforward for brokers and their customers.”
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