Redwood Bank has launched its first two and three-year fixed rate mortgages for business customers.

The specialist bank says the offers will be at loan-to-value ratios of up to 75% for secured residential investment and 70% for secured commercial property loans. 

Borrowers can choose between capital and interest, or interest-only loans, with terms of up to 30 years for residential buildings and up to 10 years for commercial properties. The deals will also offer interest-only periods that revert to capital and interest repayments.

The lender, which received its full banking licence in 2017, says both products come with “standard arrangement fees”, and early repayment charges of 2% and 1% for the two-year fixed-rate loan and 3%, 2% and 1% for the three-year fixed-rate mortgage.

Redwood Bank co-founder chief executive Gary Wilkinson says: “The time is right to introduce these new products for our customers, who are facing uncertain times. 

“We want to be able to continue to support them, and one of the ways we can do that is by taking away the anxiety that goes with rising interest rates.”

“We want to be able to offer further support to SMEs at a time when they need it. Giving them two or three years of fixed mortgage payments allows them to plan without worrying about what decisions may come from the Bank of England.

“With so many businesses facing real challenges, we are determined to do everything we can to be right by their side to provide assistance.”

The launch by the lender comes after the Bank of England raised the base rate by 50 basis points to 2.25% last week, the highest rate for 14 years and the seventh hike since December.

The move aims to help counter rising inflation, driven by food and energy costs, which the Bank now forecasts will peak at just under 11% in October, down from a previous forecast of 13%.

The Office for National Statistics’ latest data shows that inflation dipped from 10.1% in July to 9.9% in August.