Allica Bank cuts commercial mortgage rates by up to 1.20%

The business bank, which specifically focuses on serving established SMEs of between 10 and 250 employees, has reduced its rates by up to 1.20% on owner-occupied commercial mortgages and up to 0.90% on commercial investment mortgages, with a maximum value of £10 million. Allica says this is the biggest reduction in rates in its history.

The bank also has an initiative that allows businesses to achieve a further discount of between 0.25% and 0.50%, depending on loan size, EPC rating or Debt Service Cover.

The changes, with the additional discounts available, mean rates on owner-occupied semi-commercial products now start from 2.00% + Base Rate for variable rates and 5.85% on fixed rates.

Fully commercial owner-occupied products now start from 2.90% + BBR and 6.75% for fixed rates.

Semi-commercial investment are available from 2.25% + BBR or 6.20% fixed, while fully commercial investment products start at 3.60% + BBR variable and 7.35% fixed.

The news follows Allica’s recent reductions to its stress-testing and Debt Service Cover requirements across all commercial mortgage products. The bank also doubled its maximum commercial mortgage loan size from £5 million to £10 million earlier this year.

Nick Baker, chief commercial officer at Allica Bank, said: “UK businesses have been through a period of sustained uncertainty and increasing costs, but many now see an opportunity to grow and need our support on their journey.

“We believe that banks like ours have a responsibility to help established firms capitalise on a stabilising environment to the benefit of their long-term growth. That is why we’re reducing the rates on variable-rate owner-occupied commercial mortgages by as much as 1.20% to help support as many businesses as possible.

“Whether it’s investment in a new premises or existing property, we are dedicated to supporting UK businesses with even more competitive terms and an award-winning relationship-based service.”