Paragon 'may push up variable mortgage rates'

Mortgage lender Paragon has warned that it may have to push up rates on its variable-rate mortgage over the next few weeks.

Nigel Terrington, chief executive of the firm, said that although it was not hit directly by the sup-prime mortgage crisis which struck last month, it will need to take into account the added risks now facing the market.

Speaking to the Times newspaper, he added that customers could see a rise of "between ten and 20 basis points from here in".

Paragon, which specialises in providing buy-to-let mortgages, has also rejected claims that it will have to run its business down if it does not receive extra funding over the next six months.

John Heron, managing director of the firm, said: "Paragon has built a good reputation and a good mortgage book over the years with some of the lowest default rates in the industry.

"We're confident that demand for high quality assets, such as our mortgage book, will return to normal in the near future."

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