The SME bank has reduced its rates by up to 1.2 percentage points on owner-occupied commercial mortgages and up to 0.9 percentage points on commercial investment mortgages, with a maximum value of £10m.

The business stated this is the biggest reduction in rates in its history.

Allica also has an initiative which allows businesses to achieve a further discount of between 0.25 and 0.5 percentage points — depending on loan size, EPC rating, or Debt Service Coverage Ratio.

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With the additional discounts available, rates now start from:
• 2% plus base rate (variable) and 5.85% (fixed) for owner-occupied semi-commercial
• 2.90% plus base rate (variable) and 6.75% (fixed) for fully commercial owner-occupied
• 2.25% plus base rate (variable) and 6.20% (fixed) for semi-commercial investment
• 3.60% plus base rate (variable) and 7.35% (fixed) for fully commercial investment
• 3% + base rate (variable) for care homes
• 7.75% (fixed) for interest-only, owner-occupied (RLS)

The bank recently eased its stress testing and Debt Service Coverage Ratio requirements across all its commercial mortgage products.

Earlier in the year, the lender upped its commercial mortgage loan size from £5m to £10m.

Nick Baker, chief commercial officer at Allica (pictured above), sees these product changes as essential to accelerating growth: “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.”