Allica Bank cuts rates on commercial mortgage products and increases LTVs and broker procuration fees

Committed to assisting SMEs in obtaining finance for future growth, Allica Bank has revamped its commercial mortgage products to help improve access to finance. The changes include reducing interest rates and increasing the maximum Loan-To-Value (LTV). The bank has also increased procuration fees for its broker community.

The product portfolio was updated in response to Allica’s broker survey in December. It will see broker procuration fees increase from 1% to 1.5% for owner-occupied, commercial, and semi-commercial investment mortgages.

It will be applying a reduction of 0.25% to interest margins for all loans in excess of £1,500,000 on both commercial investment and commercial owner-occupied mortgages. Allica will also continue its prime rate product for owner occupiers at 3.5% plus Base Rate, for loans demonstrating two-times debt service cover up to 60% LTV.

Allica Bank has also adjusted its appetite for most trading property types, with its maximum LTV for owner-occupied mortgages increased to 80% against vacant possession value. This increase applies to loans secured on trading business premises, including children’s day nurseries, professional practices and convenience stores. Moreover, for owner occupied commercial mortgages where clients can demonstrate two-times debt service cover, it will consider a maximum LTV of 80% on most property types.

Allica Bank’s commercial and semi-commercial investment loans will now also have a maximum LTV of 75% of vacant possession value across most property types.

Nick Baker, Managing Director – Intermediaries at Allica Bank said that the input of its broker community has been key to how the bank has developed its proposition: “We have a joint mission at Allica with our broker community to support as many SMEs as possible with the access to the finance they need to achieve their goals.”

“That’s why we place so much emphasis on collaborating with brokers. The more feedback they give us on how we’re doing, the better we can adapt to ensure we’re giving them the tools they need to support their clients. This is exactly what we’ve seen with this latest round enhancements to our product offering. We look forward to evolving further with the help of our broker community in 2022.”