How Redwood Bank's New Affordability Measures Enhance Commercial Mortgages

Understanding Redwood Bank's New Affordability Measures

Redwood Bank, a specialist lender, is making strides to improve commercial mortgage affordability for professional landlords and SMEs amid a higher interest rate landscape. Following consultations with industry brokers, they have restructured their lending proposition to provide more options and flexibility for borrowers.

A Shift in Lending Products

Among the notable changes, Redwood has introduced a five-year fixed interest-only mortgage, which shifts to a capital and interest payment model thereafter. This tailored approach allows landlords and businesses to manage their cash flow more effectively during the initial years of their loans. Additionally, the lender has rolled out an alternative fee structure for their two- and three-year fixed rate options, enabling borrowers to pay a higher arrangement fee to secure a lower interest rate. This strategic move enhances affordability in a competitive market.

Targeting Professional Landlords and SMEs

Tom Worbey, the senior lending product manager at Redwood Bank, emphasized their commitment to helping small and medium-sized enterprises (SMEs) and seasoned professional landlords access the finance necessary for growth. “We offer individually assessed commercial mortgages that allow us to consider each case on its own merits,” he stated, underlining a more personalized lending approach. This is especially critical in today’s economic environment, where traditional lending routes may be closing off for many businesses.

The Green Cashback Incentive

Furthermore, Redwood Bank encourages sustainability with its Green Cashback Reward, available to landlords whose properties hold Energy Performance Certificate ratings of A to C. This program not only supports eco-friendly business practices but also provides landlords with a cash injection, fostering a dual benefit: financial relief and a contribution to a greener future.

A Summary of Benefits for Borrowers

In essence, Redwood Bank's new offerings are systematically designed to promote accessibility and sustainability in commercial lending. SMEs now have more options to navigate their financial planning, allowing them to prepare for future growth while managing current financial pressures. Their approach not only aims for economic benefits but also encourages environmentally responsible investments. This dual focus positions Redwood Bank as a forward-thinking lender in a critical market for growth.