Allica Bank looks to challenge high street mortgage rates

Allica Bank is “significantly” reducing the rates on its commercial mortgages in a look to take on high street banks on both rate and service.

The bank also wants to help support the UK business community’s sustainability efforts, offering further discounts on mortgages for SMEs looking to improve their carbon footprint.

It is predicting £1bn of committed loan offers to established SMEs this year.

“Brokers and SMEs shouldn’t have to choose between rates and service when looking for a commercial mortgage,” Allica Bank chief commercial officer Nick Baker said.

“Allica Bank is proud to offer both, with our new even more competitive rates – which are typically only offered by the high-street banks – alongside the award-winning service of our business development manager team.”

The bank is particularly excited to provide additional rate reductions for SMEs that want to reduce their carbon footprint, he said, with a further 0.25 per cent reduced rate for properties with an energy performance certificate rating of A-C.

“Allica is continuing to explore ways we can encourage businesses to invest in sustainability and a greener future,” he added.

There is a range of new enhancements coming as the bank looks to put itself level with high street banks and put pressure on the traditional lending market.

These include reduced rates for standard mortgages of more than £750,000 by 0.25 per cent, reduced interest margins on care homes and a limited-edition commercial and semi-commercial investment offering with margins over base rate as low as 3.5 per cent.

The new offers follow Allica increasing its maximum loan size for care home customers to £10m and reaching more than £180m in care home enquiries.

They also come just weeks after the bank secured £55m in equity and debt and revealed it expects to reach profitability this year.