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Paragon shelves fixed loans

Buy-to-let lender Paragon has temporarily withdrawn both of its two-year fixed-rate products due to rising swap rates.

It returned to new lending in September for the first time since February 2008 after securing a £200m revolving credit facility from Macquarie Bank.

Swap rates, the borrowing rates between financial institutions, have increased significantly over the past year.

Two-year swap rates currently stand at 1.76 per cent, an increase of 0.12 per cent in the past month and up by 0.51 per cent from January 14, 2010.

A spokeswoman says Paragon has not permanently pulled out of fixed-rate lending.

Buy To Let Funding Services principal Geoff Laird says: “I think this is a trend. We are seeing products being repriced by lenders and it is a reflection of a hardening of swap rates.”

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