Redwood Bank has announced a series of significant updates to its commercial investment and owner-occupier mortgage ranges, aimed at improving affordability and flexibility for landlords and small businesses.
The specialist lender has extended its maximum mortgage term from 25 to 30 years and lowered the minimum debt service coverage ratios across key categories to ease borrowing constraints.
For commercial investment loans, the minimum coverage ratio for limited companies has been reduced from 135% to 130%, and for personal borrowers from 150% to 145%.
The same reductions apply to commercial owner-occupier loans, reflecting the bank’s focus on creating more flexible lending conditions across its portfolio.
The updates are accompanied by reductions in interest rates, with variable rates now starting from 4.04% plus base rate and fixed rates from 7.09%.
Redwood said these adjustments were part of its ongoing efforts to support brokers and clients in a challenging market, where rising costs and higher interest rates have limited borrowing capacity and slowed transaction volumes.
Tom Worbey, senior product manager at Redwood Bank, said: “Affordability is front of mind in today’s market.
“Landlords are dealing with higher costs and tighter yields and businesses face reduced business rates relief and increased NI.
“All of these add extra burdens to these businesses, and brokers are working harder than ever to structure viable deals.
“By extending our mortgage term and reducing the minimum coverage ratios, we’re giving brokers and their clients greater flexibility to find the commercial borrowing they need.”
The revised affordability calculations apply across Redwood’s residential buy-to-let and commercial product ranges and take into account the lower stress rates following earlier rate cuts introduced by the bank.
Redwood has also unveiled a new tiered pricing structure, reinforcing its commitment to enhancing its lending proposition and supporting long-term borrower resilience.
