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Landlords and brokers are set to benefit from an affordability boost as Redwood Bank reduces its residential BTL and commercial mortgage stressed interest rates.
It builds on improvements introduced earlier this year to strengthen borrowing power for SME borrowers and landlords.
Stress testing has become a major hurdle for landlords in recent years, with higher interest rates limiting how much they can borrow and making deals harder to place. Redwood’s reduction across variable, two- and three-year fixed rates is designed to ease that pressure, improve affordability and help more cases get over the line.
Tom Worbey, senior lending product manager, said: “Brokers tell us one of their biggest frustrations is stress rates. By lowering our residential BTL and commercial mortgage stress rates, we’re giving brokers more options and helping landlords achieve the leverage they need.
“Affordability is front of mind in the current market. Landlords are navigating higher costs and tighter yields, and brokers are working harder than ever to structure viable deals.”
The update applies across Redwood’s residential BTL and commercial mortgage product ranges, with affordability calculations now reflecting the reduced stress rates.
The Bank expects the change to help brokers place more variable, two- and three-year fixed rate deals, which have been particularly constrained in recent months.
Alongside this change, the specialist business bank has introduced a new tiered pricing structure as it continues to make enhancements to its offerings.