Redwood Bank has unveiled a series of enhancements to its commercial mortgage offering, designed to improve affordability and increase leverage for experienced professional landlords and SME owner-occupiers – particularly in the face of a persistently high interest rate environment.

The changes follow extensive consultation with leading commercial finance brokers and are aimed at supporting businesses looking to invest in or expand their premises, with a particular focus on easing affordability pressures for borrowers in the South of England.

Key among the updates is the launch of a new five-year fixed rate interest-only mortgage product.

CASH FLOW AND PLANNING

The structure offers borrowers a fixed interest-only period before reverting to capital and interest for the remainder of the term – a solution tailored to support cash flow management and long-term investment planning.

Redwood is also expanding the flexibility of its existing range by introducing its Alternative Fee structure across 2- and 3-year fixed rate commercial mortgage products.

This option allows borrowers to pay a higher arrangement fee in exchange for a lower interest rate, thereby increasing the level of debt serviceable within current affordability constraints.

GREENER FUTURE

Tom Worbey (main picture), senior lending product manager at Redwood Bank, said: “We are giving SMEs choice and simplicity with our latest changes.

“For example, we have simplified our interest-only options by removing LTV bands, meaning SMEs can now access an initial interest-only period between one and five years as part of their mortgage term.

“Landlords can also benefit from our Green Cashback Reward, which is available on our commercial mortgages for properties with EPC ratings of A to C. It is our way of providing landlords with a cash injection while contributing to a greener future.”