Redwood Bank review 2026: the reversion margin sits above every variable rate it quotes

What a Redwood mortgage costs, and where the fix lands

Start with the reversion, because it is the number that decides whether a Redwood fix is a good deal. The footnote on every commercial pricing page reads: “Variable Rate inclusive of Redwood Bank Base Rate which is currently 3.75%. Fixed rates will revert to a variable margin + Redwood Bank Base Rate. The reversion margins are as follows: Tier 1 - 4.99%, Tier 2 - 5.09%, Tier 3 - 5.34%.” On residential investment and semi-commercial the reversion margins are lower, at 3.99%, 4.09% and 4.34%, but the shape is the same.

Put those against the initial rates. Tier 1 commercial variable runs from 7.64% at up to 50% LTV to 8.29% above 70% LTV on the 2% fee product. The Tier 1 commercial reversion is 8.74%. Every single initial variable rate Redwood publishes on commercial is below the rate a fixed-rate borrower reverts to, at any LTV band. On residential investment the gap is wider still: initial variable rates on the 2% fee product run 6.64% to 7.39%, and the Tier 1 reversion is 7.74%.

The fixed rates themselves are competitive and the 5% fee product is where the headline comes from. Tier 1 commercial at up to 50% LTV on a 5% fee is 6.34% for two years, 6.69% for three and 7.04% for five, which is exactly where Redwood's advertised “commercial interest rates from 6.34%” comes from. Take the 2% fee instead and the same band is 7.54% fixed or 7.64% variable. Tier 2 adds roughly 0.10% to each cell and Tier 3 roughly 0.35%. Residential investment on the same Tier 1, 5% fee, two-year basis starts at 4.84%, which is the other headline on the website and reconciles cleanly.

No floor is published on Redwood Bank Base Rate anywhere in the product guide or on the site. That is a straightforward difference from Shawbrook, which prints a 0.75% floor on its own reference rate and publishes every historic movement. Redwood publishes the current level and the reversion margins and nothing about how the base rate is set or when it changes, so the mechanism is worth having in writing before a variable rate is chosen.

Fees and exit terms are published in full and one of them is stricter than the market. The arrangement fee is 2% or 5% depending on which rate table you pick. Early repayment charges run “5% 4% 4% 3% 2% (Years 1-5)” on variable rates and on a five-year fix, 4% then 3% on a two-year fix and 4%, 3%, 2% on a three-year fix. Note the first of those. A five-year early repayment charge on a variable-rate loan is unusual; Allica charges a flat 3% for five years on variable and most lenders charge less or nothing. Overpayments of up to 10% of the original balance a year are free of charge. On bridging, a minimum of three months' interest is charged however early the loan repays.

Two cashback offers cut the other way. The Green Cashback Reward pays up to 0.5% on properties with an EPC of A to C, applied automatically, with a portfolio qualifying if at least half the properties are C or better. And from 1 July 2026 Redwood refunds 100% of the valuation fee on residential proposition mortgages where the fee is paid within 31 days of the decision in principle, paid after drawdown and combinable with the green cashback. Both are subject to change.

What Redwood lends

Commercial mortgages run from £250,000 to £10m, with single-asset caps of £6.5m up to 60% LTV and £4m at 60% or above, on terms of 2 to 30 years, capital and interest or interest only for a maximum of 20 years. The published maximum loan to value is 71.4% including the fee, which is an odd-looking number until you work back from a 70% net advance plus a fee added on top.

Semi-commercial, defined as 50% to 80% of rent coming from residential, and residential investment above 80% residential rent, both go to 76.5% including fees, from the same £250,000 floor to £10m. The website banner confirms the same figures and adds that the maximum portfolio has been increased to £10m and interest-only terms on commercial extended to 20 years.

Bridging is new. Redwood launched it by press release on 1 September 2026 and the August 2026 intermediary guide already carries the terms: residential buy-to-let bridging from £100,000 to £2m over 6, 9 or 12 months, at up to 75% including fees and rolled interest on the standard product, or the lower of 80% of day-one value and 75% of post-works value on refurbishment. Pricing is monthly, from 0.70% up to 50% LTV on the standard product to 0.85% at up to 80% on refurbishment, on a 2% fee. Interest rolls up and the loan repays as a bullet at the end.

Alongside the lending sit business and charity savings: 35-day and 95-day notice accounts and one and two-year bonds. Redwood does not offer a business current account, so unlike Allica there is no banking condition attached to the pricing and nothing to move.

Who gets approved, and the list of what Redwood will not secure against

Redwood is blunt about the gate: “The Bank's lending products are available to experienced customers only.” The experience matrix backs it up. A borrower with no investment assets is declined at any level of experience. One asset requires more than two years of experience, two assets more than one year. Owner-occupier lending asks for a different thing again: “The company must have a minimum of 3-years trading in the relevant sector, supported by financials.” Refurbishment cases need evidence of at least two completed projects.

Acceptable borrowers are individuals, UK-registered sole traders, partnerships, private limited companies and LLPs, plus trusts and SIPP or SSAS pensions. Sole traders are in. The unacceptable list is equally explicit: non-UK passport holders domiciled overseas, non-UK passport holders without permanent right to reside, non-UK registered self-employed borrowers and companies, limited partnerships and housing associations. A UK national living abroad can borrow, capped at 60% LTV. Minimum age is 21, and the youngest applicant must be no older than 85 at the end of the term on commercial investment or 75 on owner occupier. All customers must take independent legal advice.

The most useful document Redwood publishes is its list of unacceptable commercial securities, because almost nobody else puts one in writing. It rules out leisure centres and swimming pools, farms and land with grazing stock, sports clubs, golf courses and equestrian centres, libraries, cinemas, places of worship, care homes, shopping centres and non-food retail park units, fishing lakes, properties with Japanese knotweed, long leaseholds with steeply stepped ground rents or under 75 years unexpired at the end of the loan, contaminated land, nuclear fuel and energy, stand-alone garages, waste transfer sites, casinos and gaming units, sex establishments, premises needing a licence for regulated entertainment or late-night refreshment, fashion units and department stores, petrol stations and car showrooms, Grade 1 and Grade A listed buildings, properties rated F or G on EPC without an acceptable exemption, and purpose-built student accommodation outside Russell Group towns. It will also not lend where demand for letting or for sale exceeds 12 months.

Care homes on that list is the one to flag, because it puts Redwood at the opposite end of the market from healthcare lenders like Allica and Shawbrook, both of which run dedicated care books. A published exclusion list saves everyone time. It turns a two-week decline into a two-minute one.

Credit tiering is published with thresholds. Tier 1 requires no CCJs and no defaults in 24 months, no missed secured payments in 24 months, any bankruptcy discharged at least 36 months ago, a Commercial Delphi score above 50 and personal scores above 800. Tier 3 will take up to two satisfied CCJs under £250 and a bankruptcy discharged at least 12 months ago. Affordability cover runs 125% on residential buy-to-let for a limited company and 140% in a personal name, 130% and 145% on semi-commercial and commercial investment, and 130% for a limited company on owner occupier. The stress rate is pay rate only on a five-year fix, and on everything else “the higher of: Pay Rate + 1% OR 5.50%”. A portfolio landlord, meaning four or more mortgaged investment properties including the subject, has the whole portfolio reviewed at 125% cover on a 5.5% rate.

The guarantee split: 25% one side, 100% the other

Redwood publishes its personal guarantee policy in full, and it is the sharpest split in this part of the market. On commercial investment, “a 25% guarantee will be required from the ultimate director(s) of the borrowing entity”, with exceptions where the guarantee cannot be given at all, as with a SIPP, SSAS or trust, where a corporate guarantee fits better, or where the underwriter wants more than 25% because of other risk factors. On commercial owner-occupier or operating company lending, “a 100% guarantee will be required”. Debentures are “sought where available”.

A business owner buying its own premises through Redwood is therefore personally on the hook for the whole loan. On a £600,000 owner-occupier mortgage that is a £600,000 personal guarantee, against £150,000 if the same borrower held the building as an investment. Shawbrook publishes a minimum of 25% on both its commercial mortgages and its buy-to-let. Allica takes a guarantee on hotels only above 70% of vacant possession value and treats them case by case elsewhere. Cambridge & Counties says guarantees are requested but not always mandatory. OakNorth publishes nothing.

We would rather a lender printed 100% than left it blank, because a director can then price the risk before spending money on a valuation. But the difference between a 25% guarantee and a 100% one is not a detail, and it is worth more than the 20 or 30 basis points that usually separate these banks on rate. If two offers land within a quarter of a point of each other, the guarantee schedule is where the real difference is.

The ownership process, and what the 2025 accounts show

Redwood Bank Limited is company 09872265, incorporated on 13 November 2015 as Acorn Financial Partners and registered at The Nexus Building in Letchworth Garden City. It is a wholly owned subsidiary of Redwood Financial Partners Limited, and that parent is currently the subject of a change-of-control process. The chairman's statement in the 2025 accounts, signed 15 April 2026, sets it out: a 2024 indicative offer was discontinued after due diligence, the group continued to look at capital-raising options, and “This has resulted in the receipt of an alternative indicative non-binding offer for the purchase of the entire shares held by the existing shareholders of RFPL. As a result, another due diligence exercise is currently taking place.”

That is an ownership process, and it should be read as one. The accounts are prepared on a going concern basis, and the directors addressed the sale directly: having considered a completion within 12 months, they “concluded that a sale would not impact the going concern status of the Bank and that no material uncertainty results from the proposed sale with regards to the going concern status”. No material uncertainty is the auditor language that matters here. A borrower's exposure to a lender changing hands is service and appetite, not solvency: you owe Redwood, and a new owner inherits the loan book on its existing terms.

The financial year behind that process was a harder one than the marketing suggests. Profit before tax fell around 70%, from £2.7m in 2024 to £0.8m in 2025. New lending fell from £136m to £91m, redemptions rose from £55m to £85m, and the loan book was flat at £490m. Net interest margin narrowed from 4.00% to 3.48%. Total assets were £610m and deposits £547m, both slightly down. The capital position strengthened rather than weakened: CET1 capital of £48.9m at a 16.6% ratio against 15.1% a year earlier, net assets of £50.0m, liquidity of £110m and impairment charges falling from 0.4% to 0.2% of the gross book. Redwood serves over 6,900 customers with 138 employees and has lent more than £850m since 2017.

The accounts give the reason for the slowdown in one phrase: growth “constrained by the level of available regulatory capital”. That is the honest read of the whole picture. A bank that cannot raise capital cannot grow its book, which is precisely why the parent is exploring a sale, and it is why new lending nearly halved while credit quality improved. For a borrower the practical consequence is that criteria will be applied as written and there is little room for a case that needs a favour. The homepage figures, a fifth consecutive profitable year, £91m of new lending and £850m since 2017, are all accurate. So are the falls. Both come from Redwood's own documents.

Trustpilot shows 4.6 from 45 reviews as at 7 September 2026, 69% at five stars and 16% at one. On 45 reviews that distribution is noise rather than a signal, and it should not be lined up next to the tens of thousands at Shawbrook or OakNorth.

The FRN Redwood does not publish

Every other bank in this group prints a register number in its footer. Redwood does not. Its footer, identical on the website and in the August 2026 product guide, reads: “© 2026 Redwood Bank Limited. Registered in England and Wales under company registration no. 09872265 at Suite 101, The Nexus Building, Broadway, Letchworth Garden City, Hertfordshire, SG6 3TA. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.” No firm reference number appears there, on the savings protection page, in the intermediary product guide or in the text of the 2025 annual report.

We could copy a number from a third-party directory. We are not going to, because a regulatory identifier we cannot trace to the firm itself is exactly the sort of figure that gets repeated until it is wrong. The authorisation statement above is Redwood's own and it is unambiguous. A borrower who wants the reference number can search the firm by name on the FCA register or ask the bank for it.

Redwood also carries no line anywhere saying that its lending is unregulated, unlike Allica, Shawbrook and Cambridge & Counties, all three of which scope their products explicitly. The underlying position is the same, because lending secured on commercial property to a company is generally outside the consumer credit regime, but Redwood leaves the reader to know that.

On deposits it is clear enough: “All eligible deposits with us are protected up to £120,000 by the UK Financial Services Compensation Scheme”, with a homepage badge reading covered by FSCS up to 120k. That limit replaced £85,000 on 1 December 2025 and, as everywhere else, it protects savers rather than borrowers.