Aldermore has refreshed its range of commercial investment and commercial owner-occupied mortgages with a host of rate reductions and the addition of a loan to value tier.
The introduction of the 70 per cent LTV tier means the specialist bank now offers products across three LTV tiers – alongside products offering up to 60 per cent and 75 per cent LTV.
Commercial investment products for borrowers with a 30 per cent deposit include a variable-term loan, three and five-year fixes at 5.34 per cent, 5.44 per cent and 5.54 per cent respectively.
The rates for the equivalent products for commercial owner occupied products are 4.94 per cent, 5.04 per cent and 5.14 per cent.
In addition, all variable rates re-priced start from 4.59 per cent, while new three-year fixed rates are available from 4.69 per cent – 0.1 percentage point above variable rates.
New five-year fixed rates, meanwhile, now start from 4.79 per cent. This rate applies to a commercial owner occupied loan to 60 per cent LTV. The equivalent product for commercial investment customers are priced at 5.19 per cent.
At 75 per cent LTV, the loan for commercial owner-occupied borrowers is priced at 5.24 per cent, while the product for commercial investment customers commands a rate of 5.64 per cent.
What is more, the commitment fee has been halved to 0.25 per cent and 1.75 per cent arrangement fee remains unchanged.
Provider view
Charles McDowell, commercial director of mortgages at Aldermore, said: “Our latest commercial mortgage refresh provides more choice for businesses, with products available across three LTV tiers. We are pleased to be reducing rates across a range of our commercial investment and commercial owner-occupied mortgages, encouraging businesses to invest in their future.
“With such competitive fixed rates available, our new products offer commercial borrowers the option to choose the security of fixed payments for three or five years at limited additional cost.
“In addition, Aldermore’s human approach, with each application assessed by an individual underwriter, gives businesses the flexibility to shape a deal in the best possible way for their future, and our new products reaffirm our commitment to supporting SMEs.”
Adviser view
Nick Green, mortgage broker at Coventry-based Alternative Estates & Financial Services, said: “I have not brokered a commercial loan for 10 years now and it is not an area of the mortgage market that many brokers are active in. We pass on this business to specialist brokers.
"Truthfully, the business is simply too much hassle. Lenders stopped lending on vacant shops, which slowed the market significantly, forcing many lenders to exit. A lot of people who seek advice in this area have been declined the loan by their own bank."
Charges
0.25 per cent commitment fee and 1.75 per cent arrangement fee.
Verdict
Commercial mortgages have remained a niche area in the mortgage market since the 2007/08 financial crash – with such loans becoming a preserve of specialist lenders. This business remains well outside the comfort zone of most brokers, many of whom, like Mr Green, pass on the business to specialists in the area. The headache of mortgage brokers is the sheer amount of work required as each commercial mortgage is tailored to meet the specific needs of the investor and the property.
