Redwood Bank has made a series of changes to its commercial investment and owner-occupier mortgage products.

The specialist lender has extended its maximum mortgage term from 25 to 30 years and reduced the minimum debt service coverage ratios (DSCR) across key lending categories.

For commercial investment, the minimum DSCR has fallen from 135% to 130% for limited companies, and from 150% to 145% for personal borrowers. The same reductions apply to commercial owner-occupier loans.

At the same time, Redwood has cut its commercial mortgage rates, with variable rates now starting from 4.04% plus base rate and fixed rates from 7.09%.

These measures follow a series of earlier improvements introduced by the bank this year to strengthen borrowing capacity for small businesses and landlords navigating a tougher economic landscape.

Higher interest rates have reduced borrowing power and constrained deal flow across both the buy-to-let and commercial sectors. Redwood’s latest changes are designed to ease repayment pressure and improve affordability to help more transactions reach completion.

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 new terms apply across Redwood’s residential buy-to-let and commercial mortgage product ranges. Affordability calculations now reflect the lower stress rates, following recent interest rate reductions by the bank.

Redwood has also introduced a new tiered pricing structure as part of its continuing effort to enhance its lending proposition for brokers and their clients.