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Residential lending criteria

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Lending criteria PDF

Residential lending criteria

HSBC for Intermediaries


This information is correct as of 22nd May 2017

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INTERNAL - This content is for the use of FCA-authorised mortgage intermediaries only

INTERNAL - This content is for the use of FCA-authorised mortgage intermediaries only.


What's changed? Date Comment
Additional sources of income 12/05/2016 Clearer policy
Income from self-employment 12/05/2016 Clearer policy
Overseas customers 25/04/2016 Updated section
Foreign currency 06/04/2016 New section on foreign currency loans policy
Foreign nationals 06/04/2016 Updated policy
Standard variable rate 06/04/2016 New section
Capital raising 29/03/2016 Updated policy
Debt consolidation 29/03/2016 New information on debt consolidation policy
Solicitors 14/03/2015 Updated to reflect solicitors only dealing directly with HSBC and the customer

Applicant

  • The minimum age for mortgage applicants is 18.
  • As part of our responsible lending policy, we are unable to accept applications where the borrowing term extends to or beyond the customers 80th birthday.
  • Where an applicant is within 10 years of their retirement age (subject to a system maximum), we may ask for further evidence of pension provision if not already provided and the application may be assessed on projected pension income.
  • The application must be supported by a clear demonstration of the customer's ability to repay the borrowing requested for the full term.
  • See income after retirement

When you submit an application, we'll ask for one of the following documents (a separate document will be required to verify proof of identification): Please note we require postal documents delivered to the customers address - online documents are not acceptable

  • Current UK photocard Driving Licence – Full or Provisional (a provisional photocard DL can only be used for VA if there is a satisfactory other document for ID. A Full UK photocard DL can be used for both ID&VA – however, if the address is different on the DL to the customer's current address then this card can't be used for either ID or VA, even if a separate ID document is held);
  • Council Tax bills – must be valid for the current billing year and dated within the last 13 months (so in April when the new billing year starts we need to have that current bill)
  • Mortgage Statements (online statements are not acceptable). Mortgage statements from First Direct and M&S are acceptable.
  • Credit Card bills from Private Bank, John Lewis Partnership Card, M&S and First Direct are acceptable.
  • Bank, Building Society and Credit Union Statements. Online statements are not acceptable. Private Bank, John Lewis Partnership Card, M&S and First Direct statements are acceptable.
  • Insurance/Investment Documents – must be dated within the last 4 months, must indicate that a customer/financial relationship exists (John Lewis Partnership, Marks & Spencer, First Direct or HSBC documents are not acceptable). Home, Motor and Travel Insurance documents are not acceptable
  • Solicitor's letter confirming house purchase or land registry confirmation (this must be related to the purchase of the property the customer is living in currently) – we would also require satisfactory proof of their previous address
  • Northern Ireland voters card – is not showing as an acceptable VA document
  • Letter from a university, college or known language school (accredited by the UK Border Agency) – only for students on a qualifying course. Dated within the last 4 months, on official headed paper with contact name, address and telephone number or email address (of the person writing the letter so they can be contacted if necessary)
  • National ID card – only acceptable if the applicant's address is listed on the card (only acceptable for ID cards for EEA and Swiss Nationals)
  • Rent card or book – from a local council or reputable letting agency (not a private landlord), the card/book must not have expired

When you submit an application online, we automatically run an electronic identity check. If the customer's identity cannot be verified electronically, we'll accept a valid full UK photo card driving licence, this can be used to both identify themselves and verify their address.

If a customer does not have a valid full UK photo card driving licence, we'll ask for one of the following documents. A separate document will be required to verify proof of address.

  • Passport
  • UK Driving Licence (Photo Card)
  • National Identity Card (EEA and Swiss Nationals only)

If the applicant doesn't have any of the above documents, we may accept one of the following:

  • Armed Forces Identity Card
  • Benefits Agency Letter
  • Certificate of Travel (Black)
  • Disabled Parking Document (Blue or Orange)
  • Foreign and Commonwealth Office Letter (Foreign Diplomatic Staff only)
  • HMRC Tax Notification (PAYE coding notice, HMRC Notification of Working Family Tax Credit, HMRC Notification of Children's Tax Credit, HMRC Notification of Disabled Persons Tax Credit or HMRC Tax Calculation)
  • Northern Ireland Voter's Card
  • Travel Documents (Blue and Red) issued by the UK Home Office
  • Armed forces Identity card
  • Firearms/Shotgun certificate
  • Group Identification form
  • First Time Buyer – where any party to the mortgage has never previously owned property in the UK or abroad
  • Home Mover – where a HSBC or non-HSBC customer is moving home
  • Remortgage my existing mortgage – where an applicant is transferring their borrowing from another mortgage provider to HSBC
  • Remortgage my existing mortgage with Additional Borrowing – where an applicant is transferring their borrowing from another mortgage provider to HSBC and is borrowing additional funds
  • Remortgage my unencumbered property – where an applicant is borrowing money against a property they own outright, which has no existing mortgage or other charge over the property
  • Standalone Additional Borrowing (Home Owner Loan) – where an existing HSBC mortgage customer is borrowing additional funds
  • Porting – where a HSBC customer is moving home and wants to transfer the current mortgage rate from one property to another. Please note, only simultaneous porting is available via HSBC UK for Intermediaries where the sale and purchase completes at the same time
Overseas Policy

Please note, we can accept document translations from a UK based translation company, provided we can verify them via their website. When submitting foreign language documents, please provide English translations as well as the original documents.

If the customer meets the following criteria, applications can be submitted outside of the policy below.

  • The customer is a UK national working overseas on a temporary or short-term basis (e.g. on secondment or travel as part of their job) or is resident in the UK but working overseas on a regular or part-time basis (e.g. oil workers, customer travels overseas regularly as offices are based overseas). If the customer is on a permanent contract overseas and stays there full time, this would class as a non-UK resident.

Exceptions apply to British Armed Forces. Please refer to the Armed Forces policy for further information.

If the customer moves to a different country after taking a mortgage with HSBC, this may affect their ability to borrow additional money in the future.

UK and foreign nationals who are not UK residents can apply for a mortgage subject to meeting the following criteria:

  • They must evidence a minimum income of £75,000 per annum (excluding bonus, commission, overtime and rental income). for joint applications at least one applicant must meet this criteria.
    Please note: Where a customer is applying for a residential Interest Only mortgage they are required to evidence a minimum income of £100,000 in accordance with the interest only policy
  • Maximum LTV of 75% for mortgage borrowing and additional lending
  • Additional lending cannot be used for debt consolidation
  • Deposit is funded from the customer's own resources. Gifts and builder's cash backs are not acceptable, unless they are in addition to the 25% deposit provided from the applicants own resources
  • They must hold a UK bank account to service the mortgage

HSBC UK is authorised and regulated by UK regulators, and governed by UK law. Following the guidance below ensures that we remain compliant with relevant cross-border regulations and local laws applicable in other countries.

The following guidance applies to both where a customer is living, and where they are physically present. Please apply the guidance to any application where the customer is located / resident in a country other than the UK at point of application.

Only approved countries are listed below – any countries and territories not listed are ‘not approved’. If the customer does not meet the criteria in the guidance below, or the country/territory is not on the list, you cannot proceed with the application.

Country/Jurisdiction Can we provide mortgage facilities? Guidance*
Armenia Yes Residents of Armenia can apply for a UK mortgage provided the following guidance is adhered to: Documents may only be sent to Armenia if requested by the customer; they cannot be proactively sent.
Australia Yes Residents of Australia can apply for a UK mortgage provided the following guidance is adhered to:
  • Customers must not be physically located in Australia if providing advice, i.e. this means that if the customer is physically located in Australia, you cannot proceed with a residential application while they are in Australia. You can proceed with a residential application if the customer visits the UK.
  • Documents cannot be sent to, or signed in, a HSBC branch in Australia
Bermuda Yes Proceed with an application if all other relevant criteria have been met
Egypt Yes Proceed with an application if all other relevant criteria have been met
France Yes Residents of France can apply for a UK mortgage provided the following guidance is adhered to:
  • Advice and applications can only be processed where the customer is present in the UK
Greece Yes Proceed with application provided all other relevant criteria are met
Guernsey Yes Proceed with an application if all other relevant criteria have been met
Hong Kong Yes Proceed with an application if all other relevant criteria have been met
Isle of Man Yes Proceed with an application if all other relevant criteria have been met
Jersey Yes Proceed with an application if all other relevant criteria have been met
Malaysia Yes Residents of Malaysia can apply for a UK mortgage provided the following guidance is adhered to:
  • Customers must not be physically located in Malaysia if providing advice - this means that if the customer is physically located in Malaysia, you cannot proceed with a residential application while they are in Malaysia
  • You must document in the notes section of the broker portal that the advice / mortgage facility was provided at the customer's request
Malta Yes Proceed with an application if all other relevant criteria have been met
Oman Yes Residents of Oman can apply for a UK mortgage provided the following guidance is adhered to:
  • Customer is an existing Group HSBC customer
  • Customers must not be physically located in Oman if providing information, advice or making an application
  • Residents of Oman must have a correspondence address outside of Oman, in an approved country, where any mortgage documentation should be sent to
Qatar Yes Proceed with application provided all other relevant criteria are met:
  • Customer is an existing Group HSBC customer
Philippines Yes Proceed with application provided all other relevant criteria are met
Russia Yes Residents of Russia can apply for a UK mortgage provided that the following guidance is adhered to:
  • You must document in the notes section of the broker portal that the advice / mortgage facility was provided at the customer's request
  • The following wording must also appear within your documentation:
"Following our recent contact for your HSBC mortgage we enclose the disclaimer that we need to issue to you in order to comply with your country's regulations. This message is intended for the addressee only and does not constitute a 'public offering' or advertisement."
Saudi Arabia Yes Residents of Saudi Arabia can apply for a UK mortgage provided the following guidance is adhered to:
  • Customers must not be physically located in Saudi Arabia if providing information, advice or making an application. Advice and applications can only be processed in the UK.
  • Residents of Saudi Arabia must have a correspondence address outside of Saudi Arabia, in an approved country, where any mortgage documentation should be sent to
  • You must document in the notes section of the broker portal that the advice / mortgage facility was provided at the customer's request
Singapore Yes Residents of Singapore can apply for a UK mortgage provided the following guidance is adhered to:
  • Documents cannot be sent to, or signed in, a HSBC branch in Singapore
Switzerland Yes Proceed with an application if all other relevant criteria have been met
Taiwan Yes Residents of Taiwan can apply for a UK mortgage provided the following guidance is adhered to:
  • Customers must not be physically located in Taiwan if providing information, advice or making an application. Advice and applications can only be processed in the UK.
  • Residents of Taiwan must have a correspondence address outside of Taiwan, in an approved country, where any mortgage documentation should be sent to
  • You must document in the notes section of the broker portal that the advice / mortgage facility was provided at the customer's request
UAE Yes This includes Abu Dhabi, Ajman, Dubai, Fujairah, Ras al-Khaimah, Sharjah and Umm al-Quwain.

Residents of the UAE without UAE nationality can apply for a UK mortgage provided that all other relevant criteria are met.

Customers with UAE nationality must also meet the following criteria:
  • Annual income must be at least 1 million AED annually (or equivalent in an approved currency)
  • Net equity / assets must be valued at a minimum of 5 million AED (or equivalent in an approved currency)
  • The customer must declare that they have adequate knowledge and experience to evaluate the risks and benefits of entering into a mortgage with HSBC UK.
The customer must provide documentary evidence of income and assets, and adherence to all three criteria must be recorded in notes.
United States Yes Please refer to the US Persons Policy and ensure that all criteria have been met prior to proceeding with an application.

If the customer is not a US person, proceed with the application provided that all other relevant criteria have been met.
A US Person is defined as any person with US Nationality, Citizenship, Residency, Tax Resident or Green Card Holder.

Along with all guidance in the International policy, you must ensure the following is complete for any US Person:

  • Ensure that if the customer has a correspondence address overseas, any option to receive marketing Offers in Customer Preferences is set to 'No'
  • Any Homeowner Loan applications can only be drawndown into a UK bank account
  • Debt consolidation loans cannot be used to repay debt held in the US
Foreign Nationals resident in the UK

All European Economic Area (EEA) Nationals and Swiss Nationals are treated as UK nationals.

We also accept applications from Non-EEA Foreign Nationals who have been granted the right of abode or indefinite leave to remain or enter in the UK by the Home Office.

We will only lend to applicants without the right of abode or indefinite leave to remain in the UK if they meet all the following criteria:

  • The customer must evidence that they have lived and worked in the UK for a minimum of 12 months at point of application – evidenced through passport stamp
  • The customer must have a work permit / visa with at least 12 months left to run until expiry at point of application
  • Maximum LTV of 75% for mortgage borrowing or additional lending
  • Additional lending cannot be used for debt consolidation
  • Deposit is funded from the customer's own resources. Gifts and builder's cash backs are not acceptable, unless they are in addition to the 25% deposit provided from the applicants own resources
  • Foreign nationals without indefinite leave in the UK or no right of abode entitlement not meeting the above criteria are subject to the same criteria as Non-UK residents, as set out below
Non-UK Residents

For overseas customers looking to purchase a property in the UK please see the overseas customers section.

We do not currently provide guarantor mortgages.

We do not currently provide Shariah compliant home purchase plans.

We do not currently accept any Help to Buy applications via HSBC for Intermediaries.

The maximum number of applicants for a mortgage via HSBC for Intermediaries is 2.

Please note, the borrowing must be in the same name(s) as the ownership for all applications made via HSBC for Intermediaries.

Applicants may apply to remortgage at any time after they have completed their purchase. Please note that for properties owned for less than 6 months, we will require the applicant's solicitor to satisfy our responsible lending commitments and confirm the property was not purchased via a sub-sale style transaction.

For existing HSBC customers looking to borrow more, a minimum of six months will be required from the date of drawdown of the latest mortgage or Home Loan on the property being used as security.

Right to Buy

We do not currently accept applications for Right to Buy properties via HSBC for Intermediaries.

Shared Ownership

We do not currently accept applications for properties under Shared Ownership schemes via HSBC for Intermediaries. We do accept Shared Ownership applications directly in our branches and over the phone.

We do not currently accept applications for properties owned in trust.

HSBC provides a flexible service to Armed Forces personnel and we are committed to honouring the Armed Forces Covenant.

For details on how we process requests from Armed Forces customers to let their property while overseas on active service, see our consent to let section.

All applicants are credit scored via Experian as part of the full mortgage application.

The bank will not consider applications from applicants that are defined by the FCA as Credit Impaired as follows:

  • Within the last two years has owed overdue payments, in an amount equivalent to three months’ payments, on a mortgage or other loan (whether secured or unsecured), except where the amount overdue reached that level because of late payment caused by errors by a bank or other third party;
  • Has been the subject of one or more county court judgments, with a total value greater than GBP500, within the last three years; or
  • Has been subject to an individual voluntary arrangement or bankruptcy order which was in force at any time within the last three years.
Light adverse credit

Applicants who have previously missed payments on their credit commitments will usually be declined. Individual cases may be considered under exceptional circumstances.

Income

Income needs to be current, regular and consistent. Income can only be used where it is considered likely that a similar level of income will be received for the full term of the mortgage.

For applications where the LTV is less than 85%:

  • 4.49 times income for applications with income of less than £30k
  • 4.75 times income for applications with income of £30k or more
  • 5.0 times income for applications with income of £100k or more

For applications where the LTV is 85% or above:

  • 4.49 times income for applications with income less than £100k
  • 4.75 times income for applications with income of £100k or more

Note: Income is gross total income (or joint gross total income)

For income in a Foreign currency other than GBP, the amount should be converted using an appropriate currency conversion tool and input the gross income in GBP in the application.

Non-UK residents must have a minimum income of £75,000 (excluding bonus, commission and overtime). For joint applications – at least one applicant must have an individual income of £75,000 (excluding bonus, commission and overtime).

For interest only loans, customers must have an annual minimum income of £100,000. For more information, see the Interest only section of our lending criteria.

Online bank statements and online payslips cannot be accepted together; hard copies of one or the other are required, or a letter from the applicant's employer.

Criteria Proof required
With effect from 01 November 2020, we will no longer accept applications from customer’s who are receiving furloughed income. Only earned income relating to the hours worked by the applicant, and paid by their employer, can be used in the affordability assessment.
Basic income
Gross income is defined as basic salary plus any permanent allowances (e.g. car, territorial allowances) and is used to calculate net monthly pay after income tax and national insurance deductions.

  • The latest one months' worth of payslips for all customers.
    • Where the date(s) on the payslip(s) shows as DD/MM/YYYY, all dates must be within 35 days of the application
    • Where the date on the payslip shows as MM/YYYY, we will accept the payslip(s) which can be either dated in the current or previous calendar month
    • Undated payslips are not acceptable
Where a customer is unable to evidence their basic income in accordance with these requirements, the application will not be able to proceed.

See Evidential Documents Matrix for variations subject to frequency of pay.

See Income and Allowance Matrix, for confirmation of acceptable basic income, permanent allowance, shift allowance and variable income.
Top-up salaries
These can be used where the applicant can prove that the top-up salary is a guaranteed contractual entitlement. Please note, previous years' bonuses cannot be used in the income assessment.

Latest 1 months' worth of payslips in line with basic income requirements.
Bonuses, overtime and commission
Where overtime, bonuses and other allowances are shown to be regular, a maximum of 50% of the average amount received can be considered guaranteed income.
  • Acceptable: variable income that is received on a weekly, fortnightly, four-weekly or monthly basis
  • Not acceptable: variable income that is received quarterly, six-monthly or on an annual basis

Payslip(s) – see Evidential Documents Matrix for variations subject to frequency of pay.

See Income and Allowance Matrix, for confirmation of acceptable basic income, permanent allowance, shift allowance and variable income.
Employment allowances
If the customer receives a shift allowance, car allowance or large town allowance that is fixed and guaranteed, 100% can be used as income.

Payslip(s) – see Evidential Documents Matrix for variations subject to frequency of pay

See Income and Allowance Matrix, for confirmation of acceptable basic income, permanent allowance, shift allowance and variable income.
Fixed-term contracts
Applicants must have been employed for a minimum of 12 months or more continuous service in the same type of employment, providing there is a minimum of 6 months of the current contract remaining and past history suggests that their current contract is likely to be renewed.

Please note: Applicants are treated as employed contractors unless they pay their own tax

The latest one months' worth of payslips in line with basic income requirements
Any bonus, overtime, commission must be evidenced in line with the Bonus/Overtime/Commission policy

  • Latest P60 AND;
  • Current contract of employment with at least 6 months remaining AND;
  • The latest one months’ worth of payslips in line with the basic income requirements
Zero-hour contracts and agency workers
The customer must have been employed for a minimum of 12 months or more with the same employer, as evidenced by latest P60.

The last years P60 compared to the annualised figure from the average of the last three months' worth of payslips must be used in the affordability assessment. If the annualised figure from the average of the last three months' worth of payslips is lower than the last years' P60, then the annualised figure should be taken.

Any bonus, overtime, commission must be evidenced in line with the Bonus / Overtime / Commission

  • Latest P60
  • Last 3 months' payslips, the most recent must be in line with Basic Salary requirements
Second jobs
Income from a second job can only be used where it is considered likely that a similar level of income will be received for the full term of the mortgage.

We would also take into account the number of hours worked and the sustainability of the applicant having two jobs.

Evidence in line with basic income criteria
Parental Leave (Maternity/Paternity)
Where any applicant is on, or is about to commence a known period of parental leave, for the purposes of assessing affordability, the overall lending assessment will be based on the "return to work" income details.

  • Where the customer advises they will return to work on the same terms, the normal (pre-parental leave) income can be used. Any future child care costs should be incorporated in the affordability assessment
  • Where the customer advises they will return to work on reduced hours, the reduced income and/or future child care costs should be incorporated in the affordability assessment. This should be done on a pro-rata basis based on previous income
  • Where the applicant indicates that they do not intend to return to work, or have yet to make up their mind, affordability must be assessed discounting their income
  • In all cases, the known period of parental leave and how the customer(s) intend to maintain the mortgage payments and subsidise commitments/lifestyle whilst on parental leave must form part of the affordability assessment, i.e. employee benefits, Statutory Maternity Pay (SMP), partner's income (where party to the mortgage), savings, etc.
  • All dependent children including the new addition/s, should be included within the application

  • The latest one months' worth of payslips in line with Basic Salary requirements. For customers already on parental leave, where the full annual income is not evident on the latest months' worth of payslips, the latest one months' worth of payslips received prior to commencement of leave will be required.
Other Leave (i.e. reduced income for a defined period of time)
Where any applicant is on, or is about to commence a known period of leave, for the purposes of assessing affordability, the overall lending assessment will be based on the "return to work" income details.

  • Where the customer advises they will return to work on the same terms, the normal (pre-leave) income can be used where supported by an employer's letter
  • Where the customer advises they will return to work on reduced hours, the reduced income should be included. This should be done on a pro-rata basis based on previous income and supported by an employer's letter
  • Where the applicant indicates that they do not intend to return to work, or have yet to make up their mind, affordability must be assessed discounting their income
  • In all cases, the known period of leave and how the customer(s) intends to maintain the mortgage payments and subsidise commitments/lifestyle whilst on leave must form part of the affordability assessment, i.e. employee benefits, partner's income (where party to the mortgage), savings, etc.


  • The latest one months' worth of payslips in line with basic income requirements
  • A letter from the employer confirming when the customer is returning to work, full income details (including pre-leave income) and working hours
New Employment (commenced within the last 6 months)/Probationary Periods
A copy of the contract of employment is required to establish whether a permanent contract or temporary term contract is held.
  • Permanent Contract – Where the applicant is in permanent employment and the contract states an initial probationary period, the income should be treated as “Employed Income” in accordance with the Income from employment policy and used in the affordability assessment
  • Temporary Contract (fixed term contract) – Where the applicant is working on a temporary contract at the end of which the employer has the option to determine if a permanent contract will be offered, then the income will not be considered in the affordability assessment, unless the Fixed Term Contract policy is met.
Customers who have started new employment or starting new employment with a different employer within 3 months of applying for a mortgage and are unable to provide their first payslip, in accordance with the Employed Income/Evidence required policy will be considered providing the difference in basic salary between the new employment and previous/current employment is equal to or less than 20%

Where the customer has not received their first payslip, their open-ended Contract of Employment or letter of appointment from the new employer can be used together with the latest payslip from their previous/current employment

Where the difference in basic salary between the new employment and previous/current employment is greater than 20% then we need to comply with the current policy whereby the first payslip from the new employment will be required.
The latest payslip from their previous/current employment should be in line with basic income requirements

We will also consider applications where the customer will receive a decreased salary, in these cases the lower salary should be input.
Pay Rise/Promotion – not yet reflected on payslip(s)

Annual Pay Increase (less than or equal to 5 per cent of the customer's evidenced income) OR Promotion Pay Increase (less than or equal to 20 per cent of the customer's evidenced income)

  • The latest one months' worth of payslips in line with basic income requirements
  • Letter from Employer to confirm new salary
Any increases over and above these amounts must be referred to Underwriting Services for a full assessment

Note: In all circumstances the customer must provide evidence of their previous salary in accordance with the basic income policy and the increase must be payable within 3 months of the application.
Job offers
A copy of the contract of employment is required to establish whether a permanent contract or temporary term contract is held.
  • Permanent Contract – Where the applicant is in permanent employment and the contract states an initial probationary period, the income should be treated as ‘Employed Income’ in accordance with the Income from employment policy and used in the affordability assessment.
  • Temporary Contract (Fixed Term Contract) – Where the applicant is working on a temporary contract at the end of which the employer has the option to determine if a permanent contract will be offered, then the income will not be considered in the affordability assessment, unless the Fixed Term Contract policy is met.

The latest one months’ worth of payslips in line with the basic income requirements.

Customers who have started new employment or starting new employment with a different employer within 3 months of applying for a mortgage and are unable to provide their first payslip, in accordance with the Employed Income/Evidence required policy will be considered providing the difference in basic salary between the new employment and previous/current employment is equal to or less than 20%. Where the customer has not received their first payslip, their open-ended Contract of Employment or letter of appointment from the new employer can be used together with the latest payslip from their previous/current employment

Where the difference in basic salary between the new employment and previous/current employment is greater than 20% then we need to comply with the current policy whereby the first payslip from the new employment will be required. The latest payslip from their previous/current employment should be in line with basic income requirements

We will also consider applications where the customer will receive a decreased salary, in these cases the lower salary should be input.
Foreign currency
Foreign currency income is accepted, providing the applicant is from an approved country and paid in a acceptable currency. We will apply the current exchange rate on day of application.

  • The latest three months’ worth of payslips for all applicants for each income stream – the latest payslip must be dated within the last 35 days

Following the Government’s recent announcement of a 2nd national lockdown, the below changes for assessing self-employed income have been introduced with immediate effect:

New applications

Please check with your customer(s) if their business has been impacted by the recent tightening of COVID restrictions, as this this will not be reflected in their last 60 days’ worth of business bank statements.

Unfortunately, if your customer(s) is impacted, we will not be able to process an application at this time. As soon as restrictions are eased and they can evidence that their income is no longer impacted, you will be able to submit their application as normal.

Pre-offer applications

If your customer(s) has been impacted by the recent COVID restrictions since submitting their application, please contact your local BDM or call the Broker Support Helpdesk to advise us of any changes. If we are not made aware, it could result in them proceeding with borrowing they may not be able to afford.

Your customer’s application will proceed as normal if their financial situation hasn’t been impacted, however we may ask for further documents to ensure income is sustainable. All self-employed applications will continue to be reviewed by an underwriter.

Criteria Proof Required
Sole traders/ Partnerships/ Limited Liability Partnerships (Category 2 & 3)
We will consider the average net profit (or applicant's share of the net profit for partnerships) over the last 2 years. However, if the latest year is lower than the average, that figure will be used.
  • Last two years Tax Calculation* and corresponding Tax Year Overviews (The latest documentation must be dated within the last 18 months)
*Tax Calculations can be an online print out from HMRC website, an SA302 or the computation produced by the customer's accountant using commercial software and submitted to HMRC
HMRC Documentation
Not all self-employed customers are legally obliged to produce financial accounting information for their business. HMRC Documentation is acceptable where the self-employed customer meets the following criteria:
  • Trading less than two years
  • Not compelled to produce annual accounts (sole trader)
  • Where large partnerships and limited companies are not disposed to release accounting information due to sensitivity of content
In these instances, the last two years Tax Calculations* and corresponding Tax Year Overviews should be obtained (*Tax Calculations can be an online print out from HMRC website, an SA302 or the computation produced by the customer's accountant using commercial software and submitted to HMRC).

Please note: The latest HMRC documentation/accounts must be dated within the last 18 months.

If providing financial accounts instead of HMRC documents, these must be signed by an accountant.
Limited liability partnerships with 200 or more partners (Category 1)

  • Letter issued by either the company finance director or accountant (the letter must detail the customer's earnings over the past two years and be dated within the last three months
For customers changing from an employed position to a partner within a LLP in the last 2 years, a combination of evidence can be accepted to confirm income:

  • For time served as an employee, income can be evidenced in line with our requirements for employed customers.
  • For time served as a LLP partner, income can be evidenced in accordance with the LLP Category Guide.
If the customer has not yet completed a year within the LLP, additional confirmation of the customer's shareholding must be obtained by way of partnership agreement or letter from the Finance Director/Company Accountant, in addition to the basic evidential documentation required for Partnerships and LLPs
Limited companies
We will consider the applicant's share of net profit after corporation tax averaged over the last 2 years, along with their salary (often referred to as director's remuneration or emoluments). If the latest year is lower than the average, that figure will be used.
The last 2 years’ finalised financial accounts, the latest of which must be dated within the last 18 months. These do not have to be signed by an accountant unless they are being provided by an International customer for a Limited Company based overseas.
Company Director with 25 per cent or less shareholding
Will be classed as employed, applying employed policy for assessing and evidencing income (i.e. basic income requirements). Applications that meet affordability on employed income should not have net profit details included in the assessment. Please note: where the application fails affordability based on employed income alone, the application can be progressed using both employed income and net profit. Where net profit is required for affordability, the application must be evidenced in line with the self-employed income policy requirements.
Company Director with 25 per cent or more shareholding
Will be classed as self-employed and will need to be assessed in line with the self-employed policy. The application must be referred to Underwriting for assessment. Company Directors with 25 per cent or less shareholding in the company will be classed as employed, applying employed policy for assessing income.

If there are multiple directors within the business, and the financial accounts do not confirm the distribution of salary to each director, then evidence will be required from either the last 2 years P60's or last 2 years Tax Calculations* and corresponding Tax Year Overviews.

* Tax Calculations can be an online print out from HMRC website, an SA302 or the computation produced by the customer's accountant using commercial software and submitted to HMRC.

Please note: The latest HMRC documentation/accounts must be dated within the last 18 months.
Sub-Contractors (SC) including Construction Industry Scheme (CIS) Contractors and individuals working for an Umbrella Company
Contractors who will pay their own tax will be treated as Self-Employed

Sole Traders/Partnerships: Refer to the evidential documentation requirements for Sole Traders/Partnerships (including LLP with fewer than 200 partners)

Limited Companies: Refer to the evidential documentation requirements for Limited Companies
Foster Carers
Foster Carers Income will be treated as self-employed income as per HMRC guidance. We will consider the average income over the last two years, however if the latest year is lower than the average then the latest year’s figure will be used.
  • A letter from the foster agency confirming the total foster income received for each of the last two years as at the point of application

    In addition to the above we will also need to be advised of:
  • The number of foster children currently in the applicant’s care
  • If there are any known or foreseeable changes in the level of foster care income
Supply teachers
We will consider applications from supply teachers providing all their income is generated in the same line of work.
  • Last 2 years' P60s
  • The latest one months' worth of payslips in line with basic income requirements
Criteria Proof required
Investment income
Investment income will be considered by the bank where the investment is deemed credible and can be evidenced by three years' worth of Tax Calculation*, corresponding Tax Year Overviews and portfolio statements.

The bank will not accept any form of speculative investment as an income source for any reason.
3 years' worth of Tax Calculations*, corresponding Tax Year Overviews and portfolio statements – this must detail the nature of the investment and the current value.

*Tax Calculations can be an online print out from HMRC website, an SA302 or the computation produced by the customer's accountant using commercial software and submitted to HMRC
Rental income
Where a customer wishes to use rental income in the residential affordability assessment, we can only proceed where the customer is not deemed to be either a professional or portfolio landlord. In all cases the BTL borrowing and associated costs are to be captured in the affordability assessment.

Please note: Where rental income is not being used to support the affordability assessment of a residential mortgage, there is no requirement to obtain evidence of any BTL income that the customer may have. However, all associated costs of the BTLs must be included in the affordability assessment.

Our policy for lending to customers with Buy to Let (BTL) properties and definitions of a 'Professional Landlord' and Portfolio Landlord are as follows:

Professional/Portfolio Landlord
We will not provide BTL mortgage facilities where it has been evidenced that a customer is classified as either a Professional Landlord or Portfolio Landlord. Residential mortgage facilities will only be accepted on the above basis whereby rental income is excluded from the assessment, but all expenditure related to the customer's BTL properties are included within the application.

A professional/portfolio landlord is a person(s) with:
  • BTL borrowing greater than £2 million across all lenders; or
  • More than 50 percent of the customer's total gross income (joint income) is derived from rental income
  • Four or more BTL mortgaged properties in aggregate at the end of the transaction eg maximum of three BTL mortgaged properties at the end of the residential application) Note: the number of existing BTL mortgaged properties should include any additional BTL properties which are in the process of being mortgaged with ourselves - Portfolio Landlord

    This includes income via a holding company.

All BTL borrowing and rental income must be evidenced by the customer where the income is being used to support a residential mortgage and for all for all BTL applications. This will support the identification of
Professional/Portfolio Landlords. The following evidence must be obtained-
  • The latest years tax return and/or business accounts (which must be dated within the last 18 months)
Exceptionally, an extract from tenancy agreements and bank statements showing rental income, mortgage payments and outgoings related to the BTL property are acceptable where:
  • Customer is paying tax related to their BTL income via PAYE – this will need to be evidenced via a notice of coding and/or payslips; or
  • Properties have been purchased within the current tax year; or
  • Where the customer is not paying tax on the BTL income due to their overall gross income level being less than their personal allowance.
Where a customer is unable to meet the above requirements, we are unable to agree BTL borrowing.

Note: we cannot accept future income for properties which are not yet let.
Maintenance income
Using 100% of maintenance income is acceptable, providing there is a court order in place and must be evidenced over the term of the mortgage.

A copy of the maintenance agreement received under a Court Order or a CSA assessment.
Private pension
100% is acceptable
The category of pension must be confirmed. Where a customer is in receipt of a 'Drawdown' pension, extra documentation to confirm the value of the pension pot remaining will be required.

Latest pension payslip(s):
  • Where the date(s) on the payslip(s) shows as DD/MM/YYYY, all dates must be within 35 days of the application
  • Where the date on the payslip shows as MM/YYYY, we will accept the payslip(s) which can be either dated in the current or previous calendar month
  • Undated payslips are not acceptable
Or
Latest pension annual statement or P60

And
For Flexi-Access Drawdown (FAD) or Capped Drawdown (sometimes referred to as ‘Drawdown Pensions’ or ‘Income Drawdown’) a statement/letter from the pension provider confirming the remaining pension fund will be required. Dated within one year of application.
State pension
100% is acceptable, providing it is already being received.

Latest pension payslip(s):
  • Where the date(s) on the payslip(s) shows as DD/MM/YYYY, all dates must be within 35 days of the application
  • Where the date on the payslip shows as MM/YYYY, we will accept the payslip(s) which can be either dated in the current or previous calendar month
  • Undated payslips are not acceptable
Or
Latest pension annual statement or P60

And
The latest month's personal bank statement(s) (or the HBUK 35/first direct 30 day internal transaction list) obtained to verify credit commitments should be used to validate the net amount matches the credit on the bank statement where possible.
Pension Projection
Latest private/company pension projection statement
Where the statement provides different levels of estimated income, the average/normal return or equivalent will be used.

And/or
State pension projection obtain from the government website.
Confirmation of pension provision
Where an application extends beyond anticipated retirement age but applicant is more than 10 years from this at point of application
Latest payslip confirming pension contributions
Or
Latest annual pension scheme statement
Or
Confirmation of pension scheme participation
Or
A bank statement showing pension payments
Income after retirement
As part of our responsible lending policy, we are unable to accept applications where the borrowing term extends to or beyond the customers 80th birthday.

Where an applicant is within 10 years of their retirement age (subject to a system maximum), we may ask for further evidence of pension provision if not already provided and the application may be assessed on projected pension income.

Consideration will be given to:

The period of time remaining until retirement; the closer the customer is to retirement the more robust the evidence of income should be. The type of employment and whether the customer will be able to continue to work. Although income normally decreases at retirement, we will consider that expenditure may also decrease, such as commuting costs or costs associated with financial dependents' income.

For applications where the borrowing extends to or beyond the customers intended retirement age
Income from benefits
Benefit income in the following forms can only be used where these are evidenced to be assured and regular and must be evidenced over the term of the mortgage:
  • Child Benefit
  • Child Tax Credit/Working Tax Credit
  • Child Support Agency Awards
  • Universal Credit

Statement/Letter from the Department for Work and Pensions (DWP) – this must be dated within the last 12 months.
Where a customer is in receipt of the Universal Credit payment, a breakdown of benefits and who they are payable to must be evidenced and we will only consider the acceptable forms of benefit payments.

When assessing benefit income you must consider-
  • Whether the benefit payable is in line with the customer's gross annual income. For further guidance please refer to the Government website.
  • Dependents' age versus term requested.
The bank does not accept any other benefit income for mortgage purposes, as we are unable to suitably evidence that the payments will be received for the duration of the mortgage term.
Disability Benefits
Disability allowances in the following forms can be accepted where these are of a long term nature:
  • Disability Living Allowance(DLA)
  • Disability Income Support
  • Industrial Injuries Disablement Benefit
  • Personal Independence Payment (PIP)
  • Universal Credit
Statement/Letter from the Department for Work and Pensions (DWP) – this must be dated within the last 12 months.

The latest month's personal bank statement(s) obtained to verify credit commitments should be used to validate the net amount matches the credit on the bank statement where possible.

Where a customer is in receipt of the Universal Credit payment, a breakdown of benefits and who they are payable to must be evidenced and we will only consider the acceptable forms of benefit payments.

The bank does not accept any other benefit income for mortgage purposes, as we are unable to suitably evidence that the payments will be received for the duration of the mortgage term.
  • Jobseekers allowance
  • Maintenance income without a court order
  • Bursary income
  • Mortgage subsidy
  • Rental income received from a property that is on Consent to Let terms
  • Lodgers income
  • Stipend income

Borrowing

The affordability assessment reviews the customer's net income, the customer's committed expenditure, basic essential expenditure and the basic living costs of their household. Affordability is assessed on a capital repayment basis and takes into account likely future interest rate rises.

Evidencing customer expenditure

All customer stated credit and non-credit committed expenditure must be critically assessed.

Credit commitments are verified, bank statements may be required in some cases.

For international customers the last three months' worth of bank statements and the latest months credit card statement, where a credit card balance exists, must be provided.

Debts ending within 6 months

If an applicant can provide evidence that a commitment or ongoing cost is intended to cease within 6 months of their mortgage application, we will discount this debt from the debt/income calculation.

If further clarification is needed in respect of a customer's credit commitments, we reserve the right to examine Credit Bureau information to confirm the nature and true extent of their lending exposure.

Our assessment is based on the full costs associated with the Buy to Let – not just the rental income.

All rental income must be evidenced by the latest year's tax return.

Tenancy agreements and bank statements showing rental income, mortgage payments and outgoings related to the Buy to Let property are only acceptable as evidence in the following cases:

  • The customer is paying tax related to their Buy to Let income via PAYE (this will need to be evidenced via a notice of coding and/or payslips); or
  • Properties have been purchased within the current tax year; or
  • The customer is not paying tax on the Buy to Let income due to their overall gross income level being less than their personal allowance

For customers with existing Buy to Let properties who are applying to purchase/remortgage a residential property for their own use, we will also need to ensure the request 'makes sense' and that the property being purchased or remortgaged is in line with the customer's profile.

We consider childcare and school fees as a regular outgoing and commitment, which will be assessed on a case-by-case basis.

Let to buy residential mortgages are not currently available

This will be treated as running 2 properties. Our affordability calculations will consider both mortgage balances and running costs, plus the second property and income from employment (salary multiples) criteria will apply.

Please note, only simultaneous porting is available via HSBC UK for Intermediaries, where the sale and purchase complete at the same time.

Transitional Arrangements (TA) were introduced by the FCA in order to protect customers from becoming a ‘mortgage prisoner’ or ‘trapped borrower’ i.e. unable to move home or change their interest following the introduction of more stringent affordability requirements.

TA apply where there is a variation to a residential mortgage contract where no additional borrowing is being requested except for product fees that may have been added to the loan.

TA’s only apply to existing residential HSBC UK mortgage customers. The TA policy cannot be applied to an external remortgage application, where your customer is seeking to transfer an existing mortgage from another lender without increasing their mortgage borrowing.

Under no circumstance should an application which meets TA criteria be declined or turned away without being formally assessed by an underwriter. This includes where the Decision in Principle offers less than the customers current mortgage. You will need to submit the application and all supporting documentation before the application can be considered.

Any customers who wish to complete a simultaneous porting application, who meet the TA criteria but are currently in arrears, will need to contact HSBC UK directly to complete these applications.

Property

HSBC only provides mortgages and Homeowner loans where:

  • A first legal charge (in Scotland, a first ranking standard security) over the property is/will be held. We do not provide second charge (second ranking) mortgages.
  • The property must be either freehold (which includes common hold), or leasehold.
  • All Residential leasehold properties must have more than 30 years remaining on the lease beyond the term of the mortgage at the outset.

’We will not provide residential lending in the following circumstances:

  • The property is being purchased via a Sub-sale transaction (this includes back to back transfers and assignment of contracts).
  • The property is subject to an onerous Lease clause regarding an excessive or unreasonably escalating ground rent.
  • A sole owner where a declaration of trust is to be created

The list of other unacceptable property types are:

  • Properties with Agricultural or other restrictions.
  • House Boats i.e. boats that are used as a house, not to be confused with properties on which there is a boat house used to store or keep a vessel.
  • Mobile homes.
  • Construction of a new property or the conversion to/refurbishment (Home Improvements excluded) of a residential property.
  • Uninhabitable properties (ie do not have an internal working kitchen and bathroom).
  • Residential Properties which are also used for Commercial purposes.
  • Properties not in the UK.
  • Holiday Homes that cannot be lived in all year round.

HSBC can provide mortgages in mainland England, Wales, Scotland, Northern Ireland and the Scottish Isles.

The maximum LTV borrowing on a flat is 85%. For new build flats this reduces to 80%. The maximum LTV only applies where the total loan amount is not exceeded as set out in the Loan section.

In order to be considered suitable for mortgage purposes, flats must be habitable with a fully functioning internal kitchen and bathroom and with no restrictions on occupancy.

Buildings insurance covering the full cost of re-building the flat must be taken out by the borrower and must remain in place during the term of the mortgage.

We will not normally lend where:

  • The block is above four storeys high and there is no lift;
  • There is more than 1 leasehold flat in a building (unless that building is owned or managed by a tenant's management company or committee) that is, where the landlord is either an individual or a company not owned by the tenants; or
  • The property is in an ex-local authority block where a minimum of 75% of the block is not privately owned.

Please note, while blocks of flats with more than 4 floors including the ground floor with no lift are normally considered unacceptable for mortgage purposes, some exceptions can be made. Good quality, modern ex local authority medium and high-rise purpose built or converted flats in prestigious areas of central London and certain other cosmopolitan centres will be considered on individual merit by the valuer, subject to good mortgageability and sustainable resale potential.

In all cases, we will require the valuer to confirm that the flat is both mortgageable and marketable.

Studio flats

There are no restrictions on studio flats. We can lend, subject to valuer's comments that the property is suitable security.

The following types of tenure are acceptable:

  • Freehold (which includes commonhold) or feudal (Scotland)
  • Flying freeholds (where these are a feature of local housing)
  • All Residential Leasehold properties must have more than 30 years remaining after completion of term of the mortgage. This is only the minimum requirement and will always be subject to the valuer's opinion - the valuer must be satisfied that there is a market for any property taking the lease term into consideration. Therefore, even though an application may meet the guidelines above, the property may still be declined by the valuer.
  • Leasehold flats (including flats with a share of the Freehold) are acceptable.
  • Freehold flats are only acceptable where the security will comprise the freehold of the full building within which the flat is contained or where the legal arrangements for freehold flats are satisfactory and accepted in the local market as confirmed by the solicitor or licensed conveyancer acting for the Bank (for example, in Scotland and Jersey).

Other than house boats and mobile homes, there is no particular type of property that we cannot lend against subject to the property meeting our non-standard construction type criteria.

In order to be considered suitable for mortgage purposes, properties must be habitable with a fully functioning internal kitchen and bathroom and with no restrictions on occupancy.

Buildings insurance covering the full cost of re-building the property must be taken out and must remain in place during the term of the mortgage.

We cannot provide lending for properties with covenants that restrict the period of occupation and/or the age or type of employment of the occupant.

We can lend where the commercial element represents a minor part of the property (for example a single room used by the borrower for home-working), providing the whole property can be sold as a complete residential unit.

We cannot provide residential mortgage facilities on a property that is used wholly for business purposes or where there are commercial buildings on the same title (for example, a holiday let/cottage).

We can lend against residential properties with commercial properties close by, subject to the valuer's comments that the property is suitable security.

In order to be considered suitable security, properties with an annexe/annexes must meet the following requirements:

  • The size of the annexe must be proportionate in size and smaller than the main dwelling
  • The annexe must only be occupied by a family member or staff employed by the owner of the main dwelling, with no sub-let or potential for sub-let
  • Usable internal door required if the annexe is attached to the main dwelling

The following criteria will NOT be acceptable:

  • Separate services and/or separate meters to the annexe
  • Separate legal title or formal postal address/council tax banding for the annexe
  • Non-residential uses for the annexe (e.g. Airbnb, guest house, commercial live/work, office or shop)

The bank will be guided by the type of valuation received and any additional guidance from the valuer (in cases where a PV has been completed).

Exceptionally, we can lend against properties with 2 kitchens, subject to the valuer's comments that the property is suitable security.

We will not provide residential mortgages for:

  • House boats
  • Mobile homes
  • Bed and breakfast properties
  • Properties with agricultural ties
  • Construction of a new property
  • Conversion to/refurbishment of a residential property (home improvements excluded)
  • Non-habitable properties (without a working kitchen and bathroom)
  • Residential properties which are used wholly for commercial purposes
  • Live/Work units
  • Overseas properties
  • Holiday homes that cannot be lived in all year round
Timber-framed

Timber-framed properties constructed between 1920 and 1965 are considered unacceptable for mortgage purposes due to inferior building regulations in relation to vapour barriers.

Scottwood/Swedish are also considered unacceptable for mortgage purposes.

All timber

Due to the unusual nature of the construction, properties made entirely from timber are usually considered restricted. We will be guided by the valuer's comments on marketability. If acceptable, they will be subject to a maximum LTV of 80%

Wimpey No Fines and Laing Easiform

Properties dated from 1945 onwards are acceptable, subject to the valuer's comments, at the lower LTV ratio of 80%.

Bear in mind that Wimpey No-Fines properties are currently being monitored in the north of England where some deterioration has been noted. If this construction type is subsequently defined as 'defective', this could have a significant impact on the value and saleability of the property.

Steel frame

Water penetration and condensation can cause corrosion of the steel frame causing instability of the property. These properties are acceptable subject to a satisfactory structural engineer's report, at the lower LTV ratio of 80%.

Livett Cartwright steel frames, Hawthorn Leslie steel frames with boarded finish, and BISF (British Iron and Steel Federation) are considered unacceptable for mortgage purposes.

Ex-local authority

We accept ex-local authority properties on a case-by-case basis.

If the property is a flat, we can only lend if a minimum of 75% of the block is now privately owned. Medium and high-rise ex-local authority flats are considered restricted properties with a maximum LTV of 80%.

Blocks of flats with more than 4 floors including the ground floor with no lift are normally considered unacceptable for mortgage purposes. However, good quality, modern ex local authority medium and high-rise purpose built or converted flats in prestigious areas of central London and certain other cosmopolitan centres will be considered on individual merit by the valuer, subject to good mortgageability and sustainable resale potential.

Kit-built

The following 'kit-built' type of constructions with special architectural merit or proven long-term durability are considered restricted with a maximum LTV of 80%, subject to usual warranty provision if less than 10 years old:

  • Huf Haus
  • Potton
  • Skandia-Hus
  • Border Oak (and other bulk timber kit forms)
  • Colt/Guildway (these types are subject to an entirely satisfactory valuer statement of condition and saleability, which could be enhanced by location if they are found on larger rural or semi-rural plots)
Durisol

Durisol houses are accepted up to 80% LTV, subject to a satisfactory structural engineer's report. Durisol flats are considered unacceptable for mortgage purposes.

Mundic block

Properties containing mundic block materials (primarily situated in Cornwall & Devon) must be tested using the screening test developed by the Royal Institution of Chartered Surveyors. The results of the test will be considered as follows:

A= Suitable for mortgage purposes
A/B = Restricted, acceptable at up to 80% LTV, subject to valuer's comments
B = Unacceptable for mortgage purposes
C = Unacceptable for mortgage purposes

Bellrock

Load bearing gypsum plaster panel construction is considered unacceptable for mortgage purposes.

We can provide mortgages for second homes if both loans can be serviced entirely from the applicant's salary, subject to our normal credit assessment. This is limited to one property in addition to the applicant's main residence and subject to the below:

  • A maximum of two residential properties per applicant can be owned upon completion
  • Includes properties that are mortgaged (including on consent to let), unencumbered, abroad or offshore, partially or wholly owned
  • HSBC Mortgage lending is limited to a maximum LTV of 80% per property
  • Both properties must be for occupation/use by the customer or immediate family, ie spouse, children or parent(s)
  • The property must not be let on either an Assured Shorthold Tenancy or Holiday Let basis.
  • 'Other outgoings' should include council tax, utility, insurance and property maintenance bills for any residential properties other than the property in the application
  • Second homes are subject to a maximum term of 30 years

We can only lend up to the maximum allowable LTV of the lower of the 'discounted' purchase price or valuation. This will ensure that customers are contributing a deposit to the purchase, rather than relying on any equity in the property to fund this.

Family-discounted purchase

Where the property is a discounted purchase from a family member, we will only lend up to the maximum allowable LTV of the lower of the 'discounted' purchase price or valuation. We will also require the solicitor or licensed conveyancer to satisfy themselves that the family member gifting the property is not insolvent and to arrange suitable indemnity insurance for the full value of the property if they deem it necessary.

Please note, when an applicant is purchasing a property from a family member separate legal representation is required. It is HSBC policy that the same solicitor or licensed conveyancer cannot act for both seller and buyer.

Japanese Knotweed is an invasive plant that grows rapidly and can cause structural damage to buildings and roads. The valuer will follow the RICS guidelines to assess the risk where the weed has been identified on or near the property (e.g. within 7 metres of the garden fence).

We will rely on the Valuer to confirm whether a Japanese Knotweed Survey is required and may require the following:

  • A fully paid up front Treatment Plan which has commenced with an appropriately qualified individual or company. (This should be an accredited member of an industry recognised trade association such as the Property Care Association or the Invasive Non-Native Specialists Association).
  • A minimum 10 year insurance backed guarantee to be provided on completion of the works.

Where Japanese Knotweed has been identified within 7 metres of a habitable space at the property (either within the boundary of the property being mortgaged to HSBC or on neighbouring land) and/or the Japanese Knotweed has caused serious damage to outbuildings, paths and boundary walls in addition to the above, the Treatment Plan will need to have been fully completed and we will require a copy of the Completion Certificate and 10 year Insurance backed guarantee which should be in force.

All documents relating to Japanese Knotweed will be provided to the Valuer for their confirmation that the property is suitable for mortgage security and whether there is any impact on the valuation of the property.

We define a new build property as one that will be occupied for the first time and/or has been built and completed within the last 24 months.

Although we can approve mortgages on properties not yet built subject to satisfactory valuation, we will not release funds until the property has been completed. A re-inspection may be required if the surveyor advises one is necessary in their original valuation.

Standard lending criteria apply subject to:

  • A minimum £25,000 deposit for properties is required where the LTV is greater than 75%.
  • A maximum 85% LTV for houses. The maximum LTV only applies where the total loan amount is not exceeded as set out in the Loan section.
  • A maximum 80% LTV for flats. The maximum LTV only applies where the total loan amount is not exceeded as set out in the Loan section.
  • A structural defects warranty being in place.
New Build Incentives
Financial Incentives

Financial incentives up to 5% of the property price are acceptable without impacting property value.

Where the value of a financial incentive is above 5%, the difference must still be deducted from the purchase price for LTV purposes.

Non-Financial Incentives

Any non-financial incentives offered by a builder / developer are acceptable without impacting LTV. 

Any incentives either financial or non-financial must still be declared.

Structural defects warranties

If the applicant is purchasing a property built within the last 10 years, or remortgaging a property built in the last 2 years, we require a suitable structural defects warranty to be in place. We will accept warranties from the following providers:

  • Advantage HCI
  • Aedis Warranties Ltd
  • Build Assure New Homes/Build Assure 10
  • Building Life Plans (BLP)
  • Build-Zone New Home Warranty
  • Checkmate Castle 10 Home Warranty
  • Global Home Warranties Ltd
  • International Construction Warranties Ltd (ICW)
  • Local Authority Building Control (LABC) New Home Warranty
  • NHBC
  • One Guarantee
  • Premier Guarantee
  • Protek
  • The Q Policy
  • Zurich Municipal - Please note: Although Zurich Municipal have now withdrawn from the market, we are still able to accept their policies/warranties

We do not lend to fund construction of a new property or the conversion to or renovation of a residential property.

We will consider applications for properties with leased solar panels, providing the indexed LTV is less than 95%. In line with the guidance given by the Council of Mortgage Lenders (CML), we will ask the solicitor to obtain the following:

  • Signed authorisation from the home-owner, allowing the solar panel provider to liaise with the solicitor;
  • Evidence of accreditation that the installation was made to approved standards (the installer must be accredited with The Microgeneration Certification Scheme)
  • A signed letter from the solar panel provider in line with guidance given by the CML;
  • A copy of the lease, in line with the CML letter, containing no terms which could be harmful to our interests in the property (please note, the details of the property and title number held on our records must match that on the lease to the solar panel provider); and
  • Signed copy of the HSBC Lender Agreement

To determine whether a property is suitable security for a mortgage loan, we will use either an automated valuation, managed desktop valuation or physical valuation.

Conveyancing options for purchases
Customer chooses their own Solicitor or Licensed Conveyancer firm

Once the customer has provided you with their chosen firm you need to check if the chosen firm meets HSBC criteria and if they do, then the firm can act for both customer and HSBC.

The basic criteria is -

Mortgage amount No of partners in the firm Regulation
£1 < £350k 1 or more England & Wales:
  • Solicitors Regulation Authority regulated firms must be Conveyancing Quality Scheme accredited
  • All Council Licensed Conveyancers regulated firms can act for HSBC.
All Scottish and Northern Ireland regulated firms can act for HSBC
£350k < £2m 2 or more
£2m+ 4 or more

In addition to these basic criteria the firm must have applied via LMS to be able to act for HSBC and are then subject to series of due diligence checks.

  • Firms that meet this criteria can act for the bank and the borrower but the customer will need to agree the terms and provide us with the name, address and telephone number of their chosen firm.
  • Customers could provide authority directly should they wish their solicitor to also discuss matters directly with their intermediary.
  • Please note, sole-practitioner firms are limited to applications up to and including £350,000.
Separate legal representation
  • If the customer wishes to instruct a solicitor or licensed conveyancer who does not meet the above criteria, they will still need to provide us with the name, address and telephone number of their chosen firm.
  • Customers could provide authority directly should they wish their solicitor to also discuss matters directly with their intermediary.
  • We will then instruct a firm Via LMS to represent HSBC and liaise with their chosen firm. LMS panel or Optima Legal are still required to register the bank's security and as such will have to check the work done by the customer's own solicitor/licensed conveyancer. LMS panel or Optima Legal will charge the customer a fee for this service which is the same as the legal fee charged if the customer appointed LMS or Optima Legal, please see our Legal fees for remortgaging to HSBC PDF: This PDF opens in a new window (310KB) for details. This applies regardless of whether the customers appointed solicitor/licensed conveyancer is CQS, CLC accredited, regulated by The Law Society of Scotland or The Law Society of Northern Ireland or no accreditation.
  • We cannot use Separate Representation for Remortgage applications where no additional work is required from the solicitors. This is an internal policy and there are also contractual issues when arranging this between a HSBC appointed representative and the customers selected representative.
Solicitors for remortgages

Customers have 2 options -

1 - Fees Assisted –

We will appoint a legal representative on the customer's behalf and HSBC will pay the basic legal fees. We outsource the processing of the legal requirements for the following cases to a third party solicitor/conveyancer. This will be to either Optima Legal or a solicitor/conveyancer on the Legal Marketing Services (LMS) managed panel:

  • Remortgages - with the security located in England, Wales, Scotland and Northern Ireland;
  • Remortgage – with a transfer of title; and
  • Remortgages – where the title of the property is still in a deceased person's name (probate).

LMS and Optima Legal only represent the bank when undertaking the legal processing of a remortgage, undertaking all required searches, liaising with the customer for completion of the security documentation, redeeming the existing lender and registering the charge.

Where there is additional legal work attached in the fees assisted option, to their mortgage application, the customer will need their own legal representation. The customer can choose to either:

  • Also appoint LMS or Optima Legal to act on their behalf for the additional legal work. For details of the legal fee and other disbursements which may be applicable, please see our Legal fees for remortgaging to HSBC PDF: This PDF opens in a new window (310KB).
  • Appoint a different solicitor/licensed conveyancer to act on their behalf for the additional legal work, with LMS panel or Optima Legal acting on the bank's behalf (separate legal representation). The customers' solicitor/licensed conveyancer cannot act on the remortgage or unencumbered loan. In addition, the LMS panel or Optima Legal are still required to register the bank's security and as such will have to check the work done by the customer's own solicitor/licensed conveyancer for the additional legal work. LMS panel or Optima Legal will charge the customer a fee for this service which is the same as the legal fee charged if the customer appointed LMS or Optima Legal, please see our Legal fees for remortgaging to HSBC PDF: This PDF opens in a new window (310KB) for details. This applies regardless of whether the customers appointed solicitor/licensed conveyancer is CQS, CLC accredited, regulated by The Law Society of Scotland or The Law Society of Northern Ireland or no accreditation

Below is a list of the most common types of additional legal work:

  • Application for first registration, where the property is unregistered
  • Transfer of title
  • Purchase of freehold interest
  • Lease extension
  • Purchase of a subsequent share
  • Purchase of a final share

2 – Customer appoints their own Solicitor or licenced conveyancer –

Customer will waive their right to HSBC contributing towards the cost of their legal fees. The customer will need to agree cost and terms direct with their chosen firm.

Once the customer has provided you with their chosen firm you need to check if the chosen firm meets HSBC criteria and if they do, then the firm can act for both customer and HSBC.

The basic criteria is –

Mortgage amount No of partners in the firm Regulation
£1 < £350k 1 or more England & Wales:
  • Solicitors Regulation Authority regulated firms must be Conveyancing Quality Scheme accredited
  • All Council Licensed Conveyancers regulated firms can act for HSBC.
All Scottish and Northern Ireland regulated firms can act for HSBC
£350k < £2m 2 or more
£2m+ 4 or more

In addition to these basic criteria the firm must have applied via LMS to be able to act for HSBC and are then subject to series of due diligence checks.

  • Firms that meet this criteria can act for the bank and the borrower but the customer will need to agree the terms and provide us with the name, address and telephone number of their chosen firm.
  • Customers could provide authority directly should they wish their solicitor to also discuss matters directly with their intermediary.
  • Please note, sole-practitioner firms are limited to applications up to and including £350,000.
Separate legal representation
  • If the customer wishes to instruct a solicitor or licensed conveyancer who does not meet the above criteria, they will still need to provide us with the name, address and telephone number of their chosen firm.
  • Customers could provide authority directly should they wish their solicitor to also discuss matters directly with their intermediary.
  • We will then instruct a firm via LMS to represent HSBC and liaise with their chosen firm. The legal work on behalf of HSBC will cost the customer £295 including VAT, in addition to their solicitor's or licensed conveyancer's fees. Please note an additional fee of £20 inclusive of VAT will be charged if electronic registration is used.
  • We cannot use Separate Representation for Remortgage applications where no additional work is required from the solicitors. This is an internal policy and there are also contractual issues when arranging this between a HSBC appointed representative and the customers selected representative.

Contact details for fees assisted remortgage applications -

LMS:


Optima Legal:

Product

Minimum term

The minimum term is 5 years (60 months)

Maximum term

Subject to Income after retirement criteria, the following maximum term criteria applies:

Capital Repayment 35 Years (420 months)
  • Purchase
  • Remortgages – like for like remortgages
  • No additional borrowing other than where a product fee is being capitalised
  • Lending must be against the main residence
30 years (360 months)
  • Home Loans – new monies (including Home Loan linked to a remortgage)
  • Home Loans secured against an Unencumbered property
  • Foreign Currency and Foreign National loans
  • Any application for lending against a second home
Care: Where the additional borrowing is linked to a remortgage, the remortgage element will be eligible for a maximum term of 35 years, however the Home Loan term will be limited to a maximum of 30 years.
Interest Only 25 years (300 months) All applications
PLEASE NOTE: Where an application consists of combined repayment types, the maximum loan term for the capital repayment element is restricted to the Interest Only maximum of 24 years (300 months).

The minimum amount we can lend is £10,000. The minimum property value we accept is £50,000.
There is no maximum loan amount restriction for residential mortgages, as long as the application meets all other criteria.

Please note that the below matrix does not apply to Flats, New Build properties or Additional borrowing. Please visit the relevant sections for further details.

Loan Amount Capital Repayment Maximum LTV Interest Only Maximum LTV
Up to £500k 85% 75%
Over £500 to £1million 80% 75%
Over £1million to £2million 75% 65%
Over £2million 65% 50%

Please note: for split terms where there are both repayment types, the interest-only maximum LTV will apply to the combined borrowing amount. Customers meeting the eligibility criteria can now take homeowner loans/further advances lending on interest only terms up to a maximum LTV of 60%, future capital repayment borrowing will be limited to 75% for cases less than or equal to £2m, and 65% for cases over £2m.

HSBC can only lend the amount required by the existing lender for redemption.  This means if the lending requested is greater than the redemption figure, the customer will not receive the surplus funds.

The maximum LTV for additional borrowing is 85%. The maximum LTV only applies where the total loan amount is not exceeded as set out in the Loan section.

Further advances as standalone applications must be no less than £10,000. For information on further advances for debt consolidation please see the debt consolidation section.

Please note, for homeowner loans/further advances linked to a remortgage from another lender the minimum loan amount must be no less that £10,000 with the remortgage element of the lending being no less than £1000 of the total loan.

Before applying for a standalone Additional Borrowing application you will need to confirm the following:

  • The applicant(s) does not have any arrears on any of the loan parts which are associated with the property and legal title related to this application
  • The property to be mortgaged is habitable, provides suitable security and is located in the UK
    1. The applicant(s) is not applying for Additional Borrowing for any of the following purposes:
    2. To pay-off a second charge on the property the mortgage is secured against
    3. For a land purchase where the land is adjacent to the property their mortgage is secured against, and is to benefit the mortgaged property
    4. To extend the leasehold on a flat or maisonette
  • Named applicants must match the property owners

We can lend up to the maximum allowable LTV of the discounted purchase price or valuation. This ensures that customers are contributing to the purchase, rather than relying on any equity in the property to fund the deposit.

You need to confirm and document the source of an applicant's deposit as we will be unable to complete the mortgage without this information. Please do not forward any form of documentary evidence regarding deposits unless specifically requested.

Personal Savings
Funded from the customer's own resources.

Secured borrowing
Funds raised by releasing equity from another property owned by the applicant.

Family Gifted Deposit (including where protected by a Declaration of Trust)
Where the deposit has been 'gifted' by a family member, the acting solicitor/conveyancer must obtain a signed letter from the donor to confirm the deposit is a 'non-refundable and an unconditional gift and that no interest is claimed in the property'.

Please note – a family member is considered to be close relation defined as a spouse, domestic partner, grandparent, parent, sibling, half sibling, aunt, uncle, cousin, in law relation or step relation.

If a family member is contributing towards the purchase price and wishes to protect their beneficial interest by way of a Declaration of Trust, we will need to approve this and ensure our interest in the property is protected. We will also require a Letter of Consent to be signed by the contributor.
Please note: We are unable to proceed if a Declaration of Trust is to be created against a property that will be registered to a sole proprietor (property owner)

Developer Gifted Deposit/Incentive
Any incentives provided by a Developer should be discounted from the purchase price in line with credit policy. We can only lend up to the maximum allowable LTV of the discounted purchase price or valuation.

New Build Properties
Where the LTV is greater than 75 per cent, a minimum GBP25,000 deposit is required.

Foreign Nationals/Non-UK Residents
Deposit is funded from the customer's own resources, ie personal savings. Gifts are not acceptable, unless they are in addition to the 25 per cent deposit provided from the applicants own resources.

Please note that this is not exhaustive and a source of deposit not listed above can be considered subject to there being no element of personal borrowing (e.g. Personal Loan, other loan from a family member/third party, director's loan, Credit Card, Overdraft) or a gift from a third party not listed as acceptable.

Not acceptable
Unsecured credit facilities or personal borrowing (money that is borrowed by the customer other than by way of a legal mortgage over property owned by them and will need to be repaid at any point in the future) must not represent any element of the deposit.

Single applicants requesting a residential interest-only mortgage will be required to have an annual minimum income £100,000 which must meet our income eligibility criteria below. For joint applications at least one applicant must have an annual minimum income of £100,000.

Eligible income sources:

Employed income: basic + fixed allowances (excluding bonus, commission, overtime and rental income)

Self employed income: net profits + director's salary

Pension

Benefit income

With an interest only loan, the maximum term is 25 years (subject to maximum age policy) and the minimum term is 5 years. The maximum LTV is 75% for both remortgage or purchase applications dependent on the size of the loan. Customers meeting the eligibility criteria can now take homeowner loans/further advances lending on interest only terms up to a maximum LTV of 60 per cent, this will also mean that any future borrowing (irrespective of repayment type) will be limited to 60 per cent LTV).

Acceptable repayment vehicles

  • Ad hoc Capital (lending is capped at 50% LTV)
  • Savings
  • Endowments
  • Stocks and Shares ISA
  • Investments
  • Sale of Other Property

For more details, please see Residential Interest Only Repayment Strategies.

We are unable to accept the following as a suitable repayment strategy:

  • Sale of current or planned main residence at the end of the term
  • Sale of commercial or overseas property
  • Lump sum from a personal or occupational pension scheme – because of frequent changes to pension policies and regulations which make assessment of credibility difficult.

We can split a mortgage into two separate terms for example, 10 years capital repayment and 10 years interest only. Under this scenario, a fee may be payable on each portion of the loan and the interest-only maximum LTV will apply to the combined borrowing amount.

Mortgage offers are valid for 180 days from the date the offer document is issued. Where a case is still under assessment after the offer has elapsed, an offer extension may be considered on a case-by-case basis, but only in extremely exceptional circumstances.

HSBC does not currently provide offset mortgages

The interest chargeable on the mortgage balance will be calculated every day rather than at the end of each week, month or year.

A further advance for debt consolidation purposes is possible subject to customers meeting the following requirements:

  • maximum of £50,000 and
  • a maximum LTV of 80%, or 60% if there is any element of interest only borrowing.

Please note that all debt commitments will still be included in the affordability assessment, unless it can be proven that the commitment finishes in the next 6 months.

The following provides examples of common scenarios and gives guidance on whether they would be categorised by HSBC as debt consolidation (please note that this is not an exhaustive list):

Debt Consolidation Non Debt Consolidation
Monies borrowed from family and friends for the sole purpose of purchasing the property or to protect/improve our security and where there is an agreement in place for the repayment of the funds.
Please note: Where the amount of the loan exceeds £50,000 and the application is from an existing customer and generates a system refer, please refer to Underwriting Services for them to consider the application where appropriate.
Monies borrowed from family and friends for the sole purpose of purchasing the property or to protect/improve our security and where the funds were originally a gift but the customer now chooses to repay them.
Repayment of funds obtained from the customer's business: Where the funds were obtained through a Directors loan or other agreement detailing terms of repayment and were for the sole purpose of purchasing the property or to protect/improve our security. Repayment of funds obtained from the customer's business through their share of the net profit: Where the funds obtained were for the sole purpose of purchasing the property or to protect/improve our security and the customer wants to replenish the funds. These will be treated as a business investment and the HOL policy for business lending will need to be followed.
Repayment of second/subsequent charge: Where there is second or subsequent charge lending that ranks behind our charge.
Please note that repayment of a second/subsequent charge is only possible when the additional borrowing is linked to a remortgage. It is not available as a standalone Homeowner loan.
Transfer of security: Customer has first charge residential or Buy to Let mortgage lending secured against a property which was for the purpose of purchasing that property and wishes to transfer the lending to another property they own.
Repayment of contractual debt: Where a customer has a debt for which there is a contract in place stipulating the terms and conditions such as length of contract, terms of repayment etc. (For example credit card, personal loan, hire purchase agreement, PCP car agreement including repayment of the final or balloon payment). Repayment of shared equity: Where a customer has taken a mortgage with another lender along with a Government Help to Buy Loan or other shared equity provider and now wishes to remortgage to HSBC with additional lending to fully repay the shared equity charge. These will be processed in line with our policy on purchase of a final share of a shared ownership property.
Repayment of savings: Where a customer has used their savings to purchase a property or for home improvements due to the timescales involved with the mortgage process and wishes to use secured lending to replenish their savings.

Independent Legal Advice (ILA) is the process where a person is advised by their own solicitor or licensed conveyancer, in a face to face meeting in the absence of the borrower and other interested parties, as to the consequences for them of executing a mortgage deed and agreeing to secure new borrowing on a property they own or will own.

HSBC's policy is that the owner(s) of a property must be advised of the legal consequences of providing a mortgage over it to secure residential lending. This will help ensure that the bank's security is enforceable against the borrower(s) and the owner(s) of the property, that customers are treated fairly and that the bank is lending responsibly.

As a result, HSBC requires ILA in the following scenarios:

  • The security being provided is indirect (i.e. where one or more of the owners is not also a borrower). In this instance ILA is required for any owner who is not also a borrower*
  • The security being provided is direct (i.e. where all owners are borrowers) and there is a difference of more than £50,000 between one or more individual owners the owner benefitting least will require ILA
  • The funds are being gifted to a third party) and the difference in benefit to the third party compared to owners is more than £50,000. In this instance ILA is required for all owners/borrowers.

    Exception – ILA is not required where the difference in benefit is less than £50,000, regardless of funds being used for individual owners or gifted to a third party. It is also not required where funds are for school fees for a dependent child under the age of 18.
  • The funds are being injected into a business that is not 100% owned by the property owner/s and the difference in benefit to the business compared to the property owners is more than £50,000.
  • Where the business is 100% owned by the property owner/s, ILA is recommended.
ILA Costs

The customer is responsible for all ILA-related fees, and should consult their chosen ILA firm for the exact cost. Where ILA is mandatory and the application is going through the LMS panel, there is an additional fee payable to the LMS panel firm for the additional work associated with this.

Guidance on who provides the ILA

If an LMS panel is acting for HSBC as part of the transaction, the customer must instruct a different firm to provide the ILA. LMS act for HSBC in the following applications and so a conflict of interest would result if the firm were also to provide the ILA:

  • Remortgage
  • Unencumbered HOL
  • Shared Ownership *
  • Transfer of Title *

*We currently do not provide this specific type of mortgage through HSBC intermediary channel.

The person receiving ILA can use a solicitor or licenced conveyancer who they know to provide this service or they can find one by visiting:

England and Wales:

Scotland:

Northern Ireland::

Foreign Currency Loans

We accept Foreign Currency loans through HSBC for Intermediaries. Intermediaries must make customers aware of the risks of potential exchange rate fluctuations and an illustration of the potential impact of 20% exchange rate fluctuation will be provided in the KFI+.

HSBC will notify the customer of the potential impact of an exchange rate fluctuation if there is an adverse fluctuation of more than 20%.

If the customer lives in a foreign country or is paid in foreign currency this needs to be captured. For any foreign currency values other than GBP, the amount should be converted using an appropriate currency conversion tool and input as GBP in the application. Foreign currency income is subject to a haircut within automated affordability calculations - the percentage haircuts are listed in the foreign currency matrix. For a list of acceptable foreign currencies please view our foreign currency matrix here: This PDF opens in a new window. For more information on non UK residents and foreign nationals living in the UK please see the foreign nationals section, and for overseas customers looking to purchase a property in the UK please see the overseas customers section.

The HSBC Standard Variable Rate is currently 3.54%.

Existing borrowers

If a customer wishes to temporarily let their property, please ask them to contact us as they must obtain consent in accordance with the requirements of our legal charge.

Members of the British Armed Forces, including Ghurkhas, who are on Active Service All other applicants
  • Apply for a period of Consent to Let appropriate to their circumstances (e.g. duration of posting away from home in the UK or overseas).
  • Apply for Consent to Let at any point during their mortgage term.
  • We will only approve where the letting will be on an assured shorthold tenancy or company let basis (England and Wales) or a private residential tenancy (Scotland).
  • Complete a rate-switch or apply for additional borrowing during the Consent to Let period.
  • Requests will only be considered where the customer has had their HSBC mortgage for a minimum of 6 months.
  • A commonly accepted request would be a customer working abroad on a temporary basis and would like to let out their residential property.
  • We will only approve where the letting will be on an assured shorthold tenancy or company let basis (England and Wales) or a private residential tenancy (Scotland).
  • If consent is granted this will only be for 24 months.
  • The customer will not be able to complete a rate-switch, change to the terms of their mortgage or apply for additional borrowing during the Consent to Let period.

This criteria only applies to a customer’s main residential home of which they are planning to return to.

Porting of HSBC mortgages is available for existing HSBC customers on a fixed, term tracker, lifetime tracker or standard variable rate via HSBC UK for Intermediaries when the sale and purchase will be completed simultaneously. Exclusions apply to porting closed secured HSBC loans and equity buy-out applications, please ask your customer to contact us directly to complete these applications.

We offer existing HSBC mortgage customers standalone loans for a variety of additional borrowing reasons such as home improvements to the mortgaged property and for debt consolidation. Home improvements are defined as improvements to a habitable property, such as a new kitchen or bathroom, central heating, essential repairs or maintenance to the property. Renovation of properties cannot be financed by way of a residential mortgage except in extenuating circumstances where this would be in the interests of the customer and the Bank, such as flood or fire damage. Please contact your BDM or our helpdesk for further information. Further advances as standalone applications must be no less than £10,000.

Please note, for homeowner loans/further advances linked to a remortgage from another lender the minimum loan amount must be no less that £10,000 with the remortgage element of the lending being no less than £1000 of the total loan.

Before applying for a standalone Additional Borrowing application you will need to confirm the following:

  • The applicant(s) does not have any arrears on any of the loan parts which are associated with the property and legal title related to this application
  • The property to be mortgaged is habitable, provides suitable security and is located in the UK
    1. The applicant(s) is not applying for Additional Borrowing for any of the following purposes:
    2. To pay-off a second charge on the property the mortgage is secured against
    3. For a land purchase where the land is adjacent to the property their mortgage is secured against, and is to benefit the mortgaged property
    4. To extend the leasehold on a flat or maisonette
  • Named applicants must match the property owners

Lump sum and overpayments can be made at any time to our lifetime tracker mortgages.

Our fixed rate and discount mortgages have an annual overpayment allowance equivalent to 10% of the outstanding balance at drawdown or at the start of a new rate switch, giving customers the flexibility to increase their monthly repayments or make lump sum payments up to this amount if they wish.

The overpayment allowance is refreshed annually on the anniversary of the drawdown or the start of the new rate following a switch and will be based on the current balance at the time. If the customer switches rates before this anniversary date, a new overpayment allowance will commence from the date the new rate begins. An Early Repayment Charge will apply to any overpayments made above this annual allowance (either regular or ad hoc).

Where overpayments are made on an ad hoc basis, we continue to collect the same monthly payment as before, unless the customer instructs us to reduce their monthly payment.

If a customer calls us to set up a flexible regular overpayment, we send them a confirmation letter containing a projection of the savings (both interest and term) they could make if they continue to maintain the overpayment.

If the customer subsequently makes any changes to their direct debit, payment date or payment amount or if the interest rate changes, we automatically recalculate and reschedule the monthly payment based on the current balance, interest rate and remaining agreed term. We also send a new projection of savings from the date of the change to the end of the loan. Please note, the savings already made prior to the reschedule are not included in the revised projection.

Fees

Our Fee Saver deal means no booking fee and no standard valuation fee.

A completion fee is payable in all buyer and package types apart from Remortgage my existing mortgage applications via HSBC UK.

We will cover the cost of one standard valuation where this is required by HSBC as part of the mortgage application.

Other fees and charges may be payable to other parties including, but not limited to legal fees and charges levied by an existing lender.

A booking fee is charged on some of our mortgages to secure a particular mortgage rate or deal. The customer can decide to pay the booking fee in full, alternatively the customer can add the booking fee to their loan. If the customer chooses to add the booking fee to their loan, please make them aware they will pay more interest over the term of the loan than if they pay the booking fee in full at the outset.

Please note our booking fee can be refunded in some scenarios before the mortgage has drawdown, please contact your BDM or our helpdesk for further information.

These are the fees payable to the applicant's solicitor or licensed conveyancer acting on behalf of the applicant and/or HSBC. For details on the conveyancing options available to your customers, see the solicitors section.

HSBC only offer Standard Valuation Reports or a Scottish Transcript as part of our journey. If you require a more detailed type of valuation report (i.e. homebuyers or building survey) this can be sourced by contacting the Bank's valuation panel manager who is arranging the standard valuation or can be obtained independently using the services of an appropriately qualified surveyor. Details of independent surveyors who are qualified to undertake Homebuyer Reports or Building Surveys can obtained via the RICS website.

This fee is to cover the cost of electronically transferring the mortgage funds to our solicitor or licensed conveyancer so they can complete the purchase or redeem the mortgage from the existing lender.

Applicants may have to pay an Early Repayment Charge if they repay the whole or part of their mortgage early (including, if they move to a different product or lender) during a certain period. Early Repayment Charges do not apply to tracker mortgages.

Although Early Repayment Charges apply to our fixed and discount rate mortgages, we provide customers with an annual overpayment allowance equivalent to 10% of the remaining mortgage balance. This means customers can choose to increase their monthly mortgage payments or make lump sum payments up to this allowance each year that Early Repayment Charges apply, without incurring any charges. The overpayment allowance is refreshed annually on the anniversary of the drawdown or the start of the new rate following a switch, and will be based on the current balance at the time. If the customer switches rates before this anniversary date, a new overpayment allowance will commence from the date the new rate begins.

If fixed or discount rate customers exceed their annual overpayment allowance for a given year, an Early Repayment Charge will be charged on the amount they have repaid over the allowance.

HSBC does not currently charge borrowers any exit fee when they fully repay their mortgage.

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If you reproduce any information contained in this website, to be used with or advise clients, you must ensure it follows the FCA's advising and selling standards.

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