Redwood Bank Defies Market Trends by Holding Interest Rates for SMEs and Landlords

Redwood Bank has opted to hold its interest rates steady across its core lending products, defying a broader market trend of repricing driven by rising swap costs. For fintech professionals and specialist lenders, this move highlights a strategic pivot toward stability and borrower retention during a period of significant wholesale funding volatility in the UK property market.

What was announced

Redwood Bank confirmed it is maintaining current interest rates for its commercial mortgage, residential investment (buy-to-let) mortgage, and residential bridging ranges. This decision comes at a time when many competitors in the specialist lending space have either increased rates or temporarily withdrawn products to adjust for higher wholesale funding costs. By absorbing the impact of rising swap rates rather than passing them on to customers, the bank aims to provide a level of certainty for professional landlords and SMEs.

In addition to holding rates, the bank is continuing to offer 100 per cent valuation cashback on all new applications across the three primary lending ranges. This incentive is designed to help borrowers manage upfront financial pressures at a time when property investors are facing increased costs. The bank’s internal research suggests that landlords are increasingly focusing on investment opportunities closer to home, highlighting the resilience of regional property markets and the ongoing demand for specialist lending support.

The bank’s commercial mortgage, residential investment, and bridging products remain available through its intermediary partners. These partners continue to have direct access to the bank’s underwriters, a feature the bank maintains to facilitate pragmatic lending decisions and a relationship-led approach. The decision to hold firm reflects a focus on the long-term fundamentals of the commercial property and professional landlord sectors, despite current fluid market conditions.

"The market has seen significant market movement in recent weeks as lenders react to higher swap rates and increased funding costs. While many lenders have increased interest rates, we have taken the decision not to pass these recent market movements on to brokers and borrowers and to continue offering 100 per cent valuation cashback across our range."

Stuart Davidson, Chief Commercial Officer at Redwood Bank.

The companies involved

Redwood Bank is a specialist business bank focused on providing secured lending to UK small and medium-sized enterprises and professional property investors. Since its inception, the bank has positioned itself as a relationship-led alternative to traditional high-street lenders, often handling more complex cases that require manual underwriting rather than automated credit scoring. Gary Wilkinson serves as the Chief Executive Officer of Redwood Bank (Limited), leading an organization that has become a recurring fixture in the specialist lending market.

The bank operates without the legacy infrastructure of larger institutions, allowing it to remain agile in its product offerings. It primarily serves the SME sector, which often finds itself underserved by larger clearing banks during periods of economic uncertainty. Redwood’s market position is defined by its focus on commercial mortgages and the buy-to-let sector, where it competes by offering bespoke terms and direct access to decision-makers. The bank has established a significant presence among intermediary partners and brokers, who facilitate the majority of its lending activity across the UK’s regional property markets.

What FF News has reported before

FF News has tracked Redwood Bank’s activity across several complex lending scenarios and product updates. In September 2026, the bank demonstrated its appetite for intricate deal structures by Redwood Bank Secures £400k Mixed-Use Property Deal in Liverpool Using OpCo/PropCo Structure. This followed the bank’s move to Redwood Bank Expands 100% Valuation Fee Cashback to Commercial and Bridging Loans, a policy it has now reaffirmed. Earlier in the year, the lender showcased its digital capabilities by Redwood Delivers £1m Scottish Portfolio Refinance Through New Digital Platform. Additionally, the bank has been noted for its speed in execution, having Specialist Bank Completes Complex and Time-sensitive Multi-property Refinancing deals for its clients.

What this means

This move by Redwood Bank places significant pressure on other specialist lenders who are currently struggling to balance margin protection with market share. By holding rates while swap costs rise, Redwood is effectively using its balance sheet to gain a competitive advantage in the broker channel. It raises questions about how long smaller, non-bank lenders can remain competitive if they lack the capital depth to absorb these wholesale cost increases. For the wider fintech and banking sector, this highlights a growing divide between lenders who prioritize immediate margin and those willing to sacrifice short-term yield to secure long-term loyalty from professional landlords and SMEs during a volatile period.