What did Paragon announce about BTL mortgage rates?

Paragon Bank cut rates by 20 basis points across its buy-to-let mortgage range on 5 June 2026. Two-year fixed rates for green (EPC A-C) single self-contained properties now start from 3.55% at 75% LTV. Five-year fixed rates start from 4.75% on the same green products. HMO and multi-unit block products are priced 15bps higher. Properties with lower EPC ratings pay 5bps more than the green rate. Landlords can choose from nil, 3%, 4%, 5% or flat £3,995 fee structures.

How do the new Paragon BTL rates compare to other lenders?

At 3.55% for a two-year green fix, Paragon is pricing at the sharper end of the current BTL market, which has been easing gradually in 2026. The key differentiator is the EPC-linked pricing — Paragon is explicitly rewarding energy-efficient properties with better rates, a trend that is becoming more common across the lending market as lenders factor net-zero transition risk into their credit models. The 5bps premium for lower-EPC properties and 15bps premium for HMOs are broadly in line with market norms.

What EPC rating do I need to get Paragon's best BTL rate?

You need an EPC rating of A, B or C to qualify for Paragon's green mortgage range, which offers the best rates. Properties with lower EPC ratings (D through G) are priced 5 basis points higher on equivalent products. This is consistent with other lenders' green ranges and reflects the growing link between energy efficiency and mortgage pricing in the UK buy-to-let market.

Are Paragon's rate cuts available for limited company landlords?

Yes, all Paragon's buy-to-let products are available to both individual landlords and limited companies (SPVs) across England, Scotland and Wales. The full range of fee options applies to both borrower types, giving incorporated landlords the same flexibility to choose between lower rates with higher fees or higher rates with lower fees.

How do the new HMO and multi-unit block rates compare?

Paragon's HMO and multi-unit block products are priced 15 basis points higher than the equivalent green EPC single self-contained products. With the 20bps rate cut applied, two-year HMO fixes at 75% LTV start from 3.70% (3.55% green SSC + 15bps), and five-year fixes start from 4.90%. This represents a meaningful reduction for portfolio landlords who operate HMOs, where refinancing costs directly impact the viability of room-by-room rental models.

Paragon Cuts BTL Mortgage Rates to 3.55% — Green Homes Win

The short version: Paragon Bank has cut rates by 20 basis points across its entire buy-to-let mortgage range, with two-year fixed rates now starting from 3.55% for properties with EPC ratings A to C. Five-year fixes start from 4.75% on the same green products, while HMO and multi-unit block products are priced 15bps higher. Properties with lower energy efficiency pay a 5bps premium. The cuts apply across a range of fee structures including nil, 3%, 4%, 5% and a flat £3,995 option, giving landlords genuine flexibility to match their rate to their strategy.

For a market that has spent the last two years adjusting to higher financing costs, this is a meaningful signal. Paragon's move follows a broader trend of gradual mortgage rate easing through the first half of 2026, but the explicit EPC-linked pricing structure is worth understanding in detail — because it tells you something about where the lending market is heading, and what kind of property will be cheapest to finance in the years ahead.

What Paragon announced — rate cuts with an EPC twist

On 5 June 2026, Paragon Bank announced a 20 basis point reduction across its buy-to-let fixed-rate product range, alongside refreshed fee options. The headline rates apply to single self-contained (SSC) properties through Paragon's green mortgage range, which is reserved for homes with EPC ratings of A, B or C.

The key numbers at 75% loan-to-value:

Two-year fixed (green, EPC A-C): from 3.55% with a choice of fee structures
Two-year fixed (standard, EPC D-G): 5bps higher at 3.60%
Five-year fixed (green, EPC A-C): from 4.75%
Five-year fixed (standard, EPC D-G): 5bps higher at 4.80%
HMO and MUB two-year fixed: 15bps above green rate, starting at approximately 3.70%
HMO and MUB five-year fixed: approximately 4.90%

All products are available to individual landlords and limited companies across England, Scotland and Wales, making them relevant whether you hold property personally or through an SPV structure.

A 20bps cut on a £250,000 mortgage saves roughly £500 a year at current rates — not life-changing on its own, but a meaningful improvement in cashflow when combined with the general easing trend across the market.

Why the EPC link matters more than the headline rate

The real story here is not the 20bps cut — it is the fact that Paragon, like a growing number of BTL lenders, is explicitly pricing better rates for energy-efficient properties. The 5bps premium for lower-EPC homes is small today, but the direction of travel is clear. As the UK's net-zero deadlines approach and lenders face their own transition risk disclosure requirements, the gap between green and non-green mortgage pricing is likely to widen.

For investors, this creates a direct financial incentive to improve the energy efficiency of their portfolios. A property sitting at EPC D is already paying 5bps more on Paragon's books than the identical property next door at EPC C. When you multiply that premium across several properties and compound it over a five-year fix, the cost of inaction starts to look higher than the cost of upgrading cavity wall insulation or installing a more efficient boiler.

This is also consistent with the regulatory trajectory. The government has consulted on raising the Minimum Energy Efficiency Standard (MEES) for rental properties, and while the timetable has shifted, the direction has not. Properties that already meet higher EPC standards are not just cheaper to finance today — they are also insulated from future regulatory shocks that could make low-rated properties unmortgageable or unlettable altogether. Our property tax and compliance guide for 2026 covers the full regulatory landscape affecting portfolio costs.

Fee structure choices — which approach actually saves money?

Paragon has maintained a broad range of fee options alongside the rate cuts, which is a feature worth understanding because the wrong choice can wipe out the benefit of a lower headline rate. The options include:

Nil fee — highest headline rate, no upfront cost
3%, 4% or 5% fee — calculated as a percentage of the loan amount, middle-ground rates
Flat £3,995 fee — predictable upfront cost, often the best option for larger loans

A Paragon spokesperson noted that many landlords are currently opting for higher-fee products to secure a lower headline rate, which makes sense when interest rates are the primary concern. But the right choice depends entirely on the loan size, the expected hold period and whether the upfront cost can be absorbed or needs to be added to the loan.

As a rule of thumb: for smaller loans (under £150,000), the nil-fee option is often cheaper over the fixed term because the percentage fees add up to less than the interest savings. For larger loans (over £300,000), the flat £3,995 fee combined with the lowest rate tends to work out best. The middle ground depends on your specific numbers — which is exactly what our deal analysis calculator is designed to handle, letting you compare total cost across fee structures side by side.

What this means for HMO and portfolio landlords

The 15bps premium on HMO and multi-unit block products means Paragon is still treating these as higher-risk than standard single lets, which is standard practice across the BTL lending market. But the rate cut applies proportionally — the 20bps reduction flows through to HMO products too, so a two-year HMO fix now starts from approximately 3.70% at 75% LTV, depending on fee choice.

For portfolio landlords running HMOs, this matters because financing costs are a make-or-break line item in the room-by-room rental model. A 20bps reduction on a £500,000 HMO portfolio saves roughly £1,000 a year in interest — real money that goes straight to the bottom line. And with tenant demand remaining strong across most regions — as we covered in our UK rent trends analysis — the income side of the equation continues to support HMO viability where the numbers stack up.

The EPC requirement adds an extra consideration for HMO operators. HMOs often involve older properties subdivided into rooms, which can have lower energy efficiency than modern single lets. If your HMO portfolio includes properties at EPC D or below, the 5bps premium on the building's base rate plus the 15bps HMO premium means you are paying 20bps more than a standard green-rate single let. That 20bps gap is the financial incentive to prioritise energy improvements in your HMO stock.

Where this sits in the broader BTL rate picture

Paragon's move is part of a wider easing cycle that has been building through the first half of 2026. Mortgage rates have been trending gradually lower as swap rates soften and lender competition intensifies. The market has moved from the post-mini-budget peaks of 2023-24 to a more sustainable level where well-priced deals are once again available to investors with decent equity and good property condition.

But the EPC-linked pricing structure is a newer development that merits watching. Other lenders including NatWest, Barclays and Virgin Money have introduced green mortgage ranges in the BTL space, and the pattern is consistent: better rates for higher-EPC properties, with the gap ranging from 5bps to as much as 20bps depending on the lender and product. If this trend accelerates — and the regulatory pressure to transition to net-zero suggests it will — the financing cost advantage of owning efficient properties will only grow.

For investors planning their next purchase or refinance, this reinforces the case for targeting EPC C or better as a minimum underwriting criterion. Even if the immediate rate difference is small, the future trajectory points to a market where energy efficiency is a material factor in financing costs, lettability and exit value. Our complete BTL mortgage guide covers how to compare lender offers and what criteria to prioritise when shopping around.

The investor takeaway

Rates are moving in the right direction. Paragon's 20bps cut follows a broader easing trend that makes BTL borrowing more affordable than it was six months ago.
EPC rating is now a pricing variable. The 5bps premium for lower-rated properties is small today, but the direction of travel is toward wider green spreads. Make EPC C+ a portfolio standard.
Fee structure choice matters. Paragon's breadth of fee options is genuinely useful — but only if you run the numbers for your specific loan size and hold period rather than defaulting to the lowest headline rate.
HMO financing remains viable. The 15bps premium is standard, and the rate cut flows through to HMO products. The combination of lower rates and strong tenant demand supports HMO returns where the purchase price works.
Shop the whole market, not one lender. Paragon is pricing competitively, but other lenders are also adjusting. A mortgage broker can scan the full market to find the best combination of rate, fee structure and criteria fit for your specific property and borrower type.

Paragon's rate cut is not a game-changer for the BTL market on its own. Twenty basis points on a £250,000 mortgage is about £500 a year — helpful, but not transformative. What matters is the signal it sends about direction: rates are easing, competition is returning, and the lenders who are most aggressively competing for business are doing so on terms that reward energy-efficient stock. That last point is the one that will still matter five years from now, when today's rate has long been refinanced and the regulatory landscape has moved on.

If you are planning a purchase or refinance and want to stress-test how different rate and fee scenarios affect your deal, our property calculators let you model purchase price, refurb costs, rental income and financing side by side. And for a deeper look at how the broader buy-to-let market is shaping up this year, our BTL mortgage guide covers lender criteria, stress rates and the key differences between personal and SPV borrowing.