Tuesday, Sep 28, 2010
A surprising return from Para-Gone
Mortgagestrategy: Paragon returns to lending
Paragon Mortgages is returning to new lending this morning and is launching a new range of buy-to-let products targeted at professional landlord investors. The lender aims to widen choice and competition in the buy-to-let mortgage sector. Paragon will commence lending with immediate effect through a panel of brokers and will widen this distribution over the next few weeks. Paragon says it is fully committed to mortgage intermediary distribution, although it will also accept direct business.
Posted by jack c @ 10:11 AM (868 views) Add Comment
7 Comments
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1. hpwatcher said...
Well this bunch seem to think the party is going to continue.....
2. sibley's b'stard child said...
"Access to buy-to-let mortgage finance is still a major issue for...professional investors who may exceed lenders’ aggregate lending limits or who find that their more complex or unique finance requirements cannot be met by the standard buy-to-let lenders".
A return to prudent lending then is it? Indebted halfwits that can't beg, borrow or steal from any other lenders can go to Paragon.
"I can offer up my donkey, my copper-jar and my wife as collateral"
3. tyrellcorporation said...
Isn't this in the same week that Lloyds pulled out of all BTL mortages? I think Paragon can see a way of exploiting desperate landlords - and why not!
4. uncle tom said...
The piece quotes Paragon's rates for 25% & 35% equity..
...I wonder what percentage of BTL landlords have 25% equity?
A minority, I suspect..
5. drewster said...
From Reuters: "The facility, to be rated by Fitch Ratings and provided by Macquarie Bank, will be available for a four-year term to Paragon Fourth Funding Limited, and interest will be charged on the amount drawn at one month LIBOR plus 2.875 percent."
Macquarie Bank of Australia is supplying the funding. Coincidentally, Australia is one of the few countries which hasn't yet seen a downturn. When things start going sour down-under, Macquarie will withdraw from this arrangement promptly.
Looking at the figures, today's LIBOR is 0.55%, so the rate charged to Paragon is just 0.55% + 2.875% = 3.425%; which they then charge out to landlords at between 4.30% and 5.5%. With a 25%-35% cushion the risks are fairly low. Nice little earner for them!
6. charlie brooker said...
So, in summary, drug dealers resume dealing drugs. Great!
7. techieman said...
"..I wonder what percentage of BTL landlords have 25% equity?" Those that bought near the bottom of the cycle, didnt pryamid and have good solid yields - i.e. those that dont need the money?? :).