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Portfolio criteria

Please note this is only a summary of our key criteria, for full information please see our Lending guidelines and submission requirements.

Maximum LTV loan amount
Maximum LTV Loan amount
up to 80% £500,000
up to 75% £750,000
up to 70% £1,000,000
up to 65% £2,000,000
 
Maximum aggregate borrowing

Normal total mortgage exposure per borrower £5,000,000.

A total mortgage exposure above £5,000,000 may be considered on a bespoke basis upon request. If agreed, a maximum aggregated LTV of 70% will apply.

Any fees that may be added to the loan are excluded from the LTV calculations

*Varied for some products, see product features

 
Income

Applicant(s) should have a minimum combined gross annual income of £25,000 per annum.

All income must be evidenced and can include:

  • Gross employment income
  • Taxable self-employed income

Income from state benefits, state pensions and investments will not be considered, but may be taken into account when calculating the tax band applicable to an applicant.

 
Affordability

The gross rental income from the property should equal or exceed the Interest Coverage Ratio as determined using a combination of the tax band applicable to an applicant’s income and the property type.

  • The tax band applicable to the applicant with the highest income will be used
  • For limited liability partnerships, the tax band appropriate to the applicant (member) with the highest income will be used

The tax band and ICR levels are as follows:

Applicant type Single self-contained properties HMO's, multi-unit blocks and all other property types
Basic Rate Tax Payer (20%) 125% 130%
Limited company 125% 130%
Higher rate tax payers (40%) 140% 145%
Additional rate tax payers (45%) 140% 145%

To cater for the PRA affordability regulations, we will now require a fully completed property schedule on all applications before we can carry out our underwriting assessment. We will also need to ask for more information about your customer’s income to enable us to apply the appropriate tax band and ICR to the affordability assessment. Depending on the profile of the case, we may also ask for a business plan and cash flow forecast.

The future affordability assessment will be based on our current understanding of interest rates going forward and rental inflation. We must be satisfied that the applicant(s) are able to withstand increases in mortgage interest rates, cover rental voids and be able to afford the mortgage now and after any fixed/discounted period expires.

 
Minimum loan amount

£30,000

 
Age
Minimum Maximum
21 at application 80 at end of mortgage term
 
Property

Minimum property valuation - £75,000

Properties must have a minimum Energy Performance Certificate Rating of E, unless there is an applicable exemption.

Properties divided into a maximum of 20 units are considered on an individual basis. HMO's will be considered.

Part commercial properties considered where there is a commercial element not exceeding 40% of total floor space.

For multi-unit properties, HMO's and part commercial properties, landlords must have a minimum of three years’ lettings experience, and must be submitted as portfolio applications, even if the customer is classified as non-portfolio under PRA regulation.

Please see our Portfolio lending guidelines and submission requirements for the minimum valuations that apply to multi-unit properties, HMO's and part commercial properties

 
Limited companies and limited liability partnerships (LLPs)

Applications will be considered from limited companies and LLPs, and must be submitted as portfolio applications, even if the customer is classified as non-portfolio under PRA regulation.

In Scotland, additional security in the form of a floating charge will be required in all instances. In England and Wales, a floating charge will only be required from companies that have material assets and business activities other than holding and letting residential investment property.

 
Forward funding facility

Professional portfolio landlords can apply for a forward funding facility free of charge. A facility will help to provide certainty for future business plans, and allows repeat business to be written on a simplified basis.  The facility letter will be issued for a specific amount, and will be valid for a six month period. Applications made under the facility will benefit from a discount of £150 per property on the application fee, and an abbreviated subsequent property application form helps to reduce the amount of information required.

Please see our Forward funding facility information sheet for more details.

 
Consumer buy-to-let

We will not consider applications that qualify as consumer buy-to-let mortgage contracts through our portfolio range. However, we do accept consumer buy-to-let applications through our non-portfolio product range. For more information, please see our Non-portfolio lending guidelines.

 
Solicitors

We will normally instruct the applicant’s solicitors to act provided that the firm is registered on Lender Exchange, has agreed to our terms and conditions and has been accepted onto our conveyancing panel. Please see our conveyancing panel for a full list of approved firms.

Alternatively, please contact New Business Enquiries 0345 849 4040 if you require any further information.

New to Paragon?

If you are a buy-to-let intermediary who is not yet registered with us, simply complete our quick online registration form to get started.

Register now

Paragon Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England number 05390593. Registered office 51 Homer Road, Solihull, West Midlands B91 3QJ. Paragon Bank PLC is registered on the Financial Services Register under the firm reference number 604551

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