"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."
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.”
