Allica Bank cuts commercial mortgage rates and eases affordability in major product enhancement

Allica Bank, the challenger bank for established businesses, has announced a raft of enhancements to its commercial mortgage and specialist buy-to-let proposition. The changes will mean it’s able to support an even wider pool of established businesses, alongside providing a pricing discount for businesses that also open a bank account with it.

The bank has cut all its owner-occupied and semi-commercial investment mortgage rates by 0.25% from 16th June, following an earlier reduction in February this year across its lending products.

It has also announced a 0.10% cut to its specialist buy-to-let offering, which was launched earlier this year with an aim to have made £100 million in offers by the end of the year.

Allica has revealed it will also offer a special 0.25% discount for any business that opens a business current account alongside a commercial owner-occupied mortgage, as it looks to ramp up the number of customers that also use it for day-to-day banking.

This adds to Allica’s existing range of discounts, which include offering a 0.25% for properties with an EPC rating of A to C, for loans over £750,000, or for businesses which demonstrate 2x repayment cover.

Rounding off the enhancements, Allica has also improved its affordability criteria, reducing the stress rate it uses to assess base rate linked loans to just 1%, and debt service cover (DSC) requirements for semi-commercial mortgages to 120%.

Allica Bank has seen its lending grow rapidly of late, with it announcing that its loan book had grown to over £3 billion in 2024 and it has made a range of enhancements to its asset finance and bridging propositions in the last few months, too.

John Harrison, Head of Relationship Management at Allica Bank, said, "The market is changing fast and it's important that Allica is changing with it. We're in close contact with our SME clients and the wider market in Cambridgeshire, and this range of changes to our proposition reflects what we're hearing from them.

“By reducing our pricing and affordability requirements, we hope we can support even more businesses to achieve their growth plans with the speed and human expertise Allica has become known for.

“I’m pleased, too, to introduce this discount for business owners that also open a bank account with Allica, as we look to support established businesses in even more ways than just lending.”