Paragon Finance new Mortgage deals - be wary

Other

I phoned Paragon yesterday to check out their new deals, all new deals are now done on their newly introduced "standard variable rate" Their standard variable rate is set for two years and just tracks LIBOR but after 2 years it reverts back to whatever their SVR is at that time above LIBOR. The point to note here is that the minimum rate that their profit margin above LIBOR will be, is 4% BUT THEY HAVE NO UPPER LIMIT!So in 2 years time LIBOR may have gone back to 5% and they will have their 4% on top of that as a minimum but can if they want charge you 8% above LIBOR which means that you would be paying 13%. You will be completely at their mercy. I hope I have explained this ok.