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Residential lending criteria

To help you find what you're looking for, we've grouped our lending criteria into key categories. You can browse by category or use the search function to jump straight to the relevant entry.

For Buy to Let applications, see our Buy to Let lending criteria

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, applications where the borrowing extends beyond age 68 or the customer's intended retirement age will be individually assessed by an underwriter.
  • 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 online, we'll ask for one of the following documents (a separate document will be required to verify proof of identification):

  • Current UK photocard driving licence – full or provisional
  • Council tax bill, valid for the current year
  • Utility bill, dated within last 4 months
  • Telephone bill, dated within last 4 months. Mobile phone bills are not acceptable.
  • Home broadband, Sky or cable TV bill, dated within last 4 months
  • Mortgage statement from a recognized lender, dated within last 12 months. Mortgage statements from HSBC or First Direct are not acceptable.
  • Credit card statement, dated within last 4 months. Credit card statements from HSBC, First Direct, John Lewis Partnership Card and M&S Bank are not acceptable. Certain conditions may apply for documents from overseas financial providers.
  • Bank, building society or credit union statement, showing all transactions and dated within last 4 months. Bank statements from HSBC, First Direct and M&S Bank are not acceptable. Certain conditions may apply for documents from overseas financial providers.
  • Disabled parking document featuring the customer's address (blue or orange)
  • HM Revenue & Customs tax notification, dated within last 4 months. P45s and P60s are not acceptable.
  • Tenancy agreement from a local council or reputable letting agency, dated within last 12 months. Tenancy agreements from private landlords are not acceptable.
  • Letter confirming the customer's right to benefits from Department for Works & Pensions, Jobcentre Plus, a benefits agency or a veterans agency, dated within last 4 months.
  • Insurance/Investment documents from a regulated financial sector firm (signed or system-generated)
  • Solicitor's letter confirming house purchase or land registry confirmation, dated within the last 4 months
  • Northern Ireland Voter's Card

When you submit an application online, we'll ask for one of the following documents (a separate document will be required to verify proof of address). Our preferred forms of identification are:

  • 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
  • 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 – where an applicant is transferring their borrowing from another mortgage provider to HSBC
  • Home Owner Loan – where a customer is borrowing money which is not part of a UK residence purchase. Please note, Homeowner Loans are only available via HSBC for Intermediaries when linked to a remortgage from another lender
  • Buy to Let – where customer is purchasing or remortgaging a property to rent out.
    See our Buy to Let lending criteria for more details.

Applicants must be resident in an approved country, please refer to the approved country list below.

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

Please note, we can accept 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.

Country/Jurisdiction Can we provide mortgage facilities? Considerations*
Armenia Yes n/a
Australia Yes n/a
Bangladesh No n/a
Bermuda Yes n/a
Brazil No n/a
Channel Islands & Isle of Man Yes n/a
Cyprus No n/a
Egypt Yes n/a
France Yes n/a
Greece Only to Greek residents who do not hold Greek nationality or citizenship We're unable to provide residential mortgage facilities from the UK to customers with Greek nationality/citizenship as they would be subject to the processes and documentation requirements of the Greek regulator which are different from those that apply in the UK.
Hong Kong Yes n/a
India No n/a
Indonesia No n/a
Japan No n/a
Lebanon No n/a
Macau No n/a
Malaysia Yes It's advisable to record in the written advice report that the mortgage advice was provided at the customer's request
Maldives No n/a
Malta Yes n/a
Mauritius No n/a
Monaco Yes n/a
Morocco No n/a
Netherlands No n/a
New Zealand No n/a
Oman Yes n/a
Palestine No n/a
Philippines Yes n/a
Qatar Yes It is advisable to record that the mortgage advice was provided at the customer's request.
Russia Yes n/a
Saudi Arabia Yes We can provide mortgage facilities on a reactive basis to existing customers of the HSBC International bank
Singapore Yes n/a
Sri Lanka No n/a
Switzerland Yes n/a
Taiwan Yes It is advisable to record that the mortgage advice was provided at the customer's request.
United Arab Emirates (comprising of Abu Dhabi, Ajman, Dubai, Fujairah, Ras al- Khaimah, Sharjah and Umm al-Quwain) Yes n/a
United States No n/a
Vietnam No n/a
Zambia No n/a
Zimbabwe No n/a
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 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.

Please note, we can accept 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.

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. We do accept them directly in our branches and over the phone.

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.

The bank does not provide BTL mortgage facilities where it has been evidenced that a customer is classified as either a Professional Landlord or a 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.

Rental income can be used in the affordability assessment where the customer is not deemed to be a professional landlord.

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 BTL's must be included in the affordability assessment.

A professional landlord is a person(s) with:

  • Greater than £2,000,000 in total of Buy to Let borrowing (all lenders); or
  • More than 50% of the customer's total gross annual income (joint income) is derived from rental income.

This includes income via a holding company.

A Portfolio Landlord is a person(s) with:

Four or more BTL mortgaged properties in aggregate at the end of the transaction

Right to Buy

We do not currently accept applications for Right to Buy properties via HSBC for Intermediaries. We do accept Right to Buy applications directly in our branches and over the phone.

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.

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 – please call the helpdesk for more details.

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.

The maximum ratio is 4.75 times gross income (sole or combined) where the Loan to Valuation (LTV) ratio is less than or equal 90%

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.

Bank statements must not be used as the sole proof of income – payslips or business accounts are also required in line with the mortgage policy set out below.

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.

Please ask the applicant for their income details and use their proof of income to validate these responses – never fill out the application directly using the statement information provided.

Criteria Proof required
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.
For HSBC current account customers:

We can access statements for HSBC and first direct accounts. We'll need you to provide

  • Their latest 3 months of bank statements for all non-HSBC current accounts - including the account the customer's salary is paid into
  • It is not mandatory for customers to provide bank statements for all accounts held unless a customer has their salary credited to one account but their outgoings (committed, basic essential and lifestyle costs) are paid from another then 3 months statements are required for both bank accounts, in order to establish the fuller financial picture. Bank statements should be obtained for any other accounts the customer uses for other payments which impact the application such as BTL properties, Benefits, & Childcare/Education costs
  • Additionally, where it is evident that a customer makes regular transfers to other accounts these transactions need to be fully discussed and documented within the approval note and the bank statements should be obtained unless these relate to non-contractual savings.
  • The most recent bank statement shows receipt of the customer's stated income within 35 days of the application.
  • Statements for any HSBC international, HSBC Offshore and HSBC Expat accounts.

Account credited can be used as evidence if the amount credited is within 5% of the customer-stated income and the credits come from the customer's stated employer and the most recent is within 35 days of the date of application.



For non-HSBC account holders:
  • The latest 3 months bank statements and
    – Where a customer is able to evidence regular consistent net salary credits through their bank statements we accept 1 months payslip (or 4 weeks' payslips for applicants paid weekly), or
    – If net monthly salary credits fluctuate and are not consistent then we will require 3 months' payslips (or last 12 weeks' payslips for applicants paid weekly)
  • Salary must be credited within 35 days of the application (credit decision obtained date)
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.

Last 3 months' payslips.
Bonuses, overtime and commission
Where overtime, bonuses and other allowances are shown to be regular, a maximum of 50% of the average of the last 2 years can be considered guaranteed income.

Last 2 years' P60s.

If the bonus income cannot be validated by P60s, we will request to see the relevant payslips or a letter from the employer to confirm bonus payments.
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.

Last 3 months' payslips
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.

Minimum of last 3 consecutive months' payslips.
Maternity leave
Consideration will be given to how the applicant intends to maintain the mortgage payments while on maternity leave such as employee benefits, statutory maternity pay, partner's income, savings etc.

All dependent children, including new additions, should be included within the application.

Where the applicant advises they will return to work on the same terms, the last 3 months' payslips of normal pre-maternity leave income can be used. Consideration will be given to future child-care costs.

Where the applicant advises they will return to work on reduced hours, the reduced income and/or future child-care costs will be calculated on a pro-rata basis based on previous evidenced income, or supported by an employer's letter if available.

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 without their income.
Probationary period
Where an applicant has commenced employment and is on a probationary period with their employer, consideration will be given to:
  • Length of probation and how long is remaining
  • Relevant employment track record
  • Career gaps/change of career
  • Previous year's P60 if there's been a significant increase in income from new role

We may ask for a combination of payslips, bank statements, P60s, tax returns and an employment contract or letter.
Job offers
Where an applicant has yet to commence employment, consideration will be given to:
  • Relevant employment track record
  • Career gaps/change of career
  • Previous year's P60 if there's been a significant increase in income from new role

We will usually ask for P60s, tax returns and an employment contract or letter. Please call the intermediary helpdesk for more details.
Foreign currency
Foreign currency income is accepted, providing the applicant is from an approved country. We will apply the current exchange rate on day of application.

Last 3 months' payslips.

For self-employed applicants, income must be confirmed by their last 2 years' signed audited or certified accounts (the most recent being no more than 18 months old), plus a minimum of the last 3 months' commercial bank statements.

In conjunction with the assessment of financial accounting, the bank will require the provision of the last 3 months commercial bank statements or business trading management information (MI) to ensure the business is still trading at a similar level to that seen within the accounts. For existing HSBC business customers the examination of system based statements will be acceptable but for non-HSBC business customers the actual bank statements or business trading MI should be obtained dependent on the size of the business in accordance with the guide below:

Annual Turnover Documentation Required
Up to £250,000 Business Bank Statements
More than £250,000 Business Bank Statements or Business Trading MI

The bank recognises that not all self-employed customers are legally obliged to produce financial accounting information for their business. Self-Assessment Tax Returns (SATRs) are acceptable to the bank where the self-employed customer is:

  • Trading less than 2 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, Tax Returns can only be used where the income has been validated by HMRC and has formed the basis upon which customers have paid tax by way of HMRC SA302 Self-Assessment Tax Calculation/HMRC Tax Year Overview. Tax Returns for the last tax year should be completed by the 31st January the following year i.e. the 5th April 2015 tax return should be completed by the 31st January 2016.

Where a customer has completed their Self-Assessment directly with HMRC (online or paper submission) they must provide the following documentation as evidence of income:

  • Self-Assessment Tax Returns (SA100) – documentation completed by the customer and should not be treated in isolation.
  • Tax Calculation, commonly known as the SA302 – a HMRC acknowledgement of the income declared within the Self-Assessment Tax Return.

Where a customer advises that they completed their Self-Assessment via a non HMRC website, in addition to the SATR and SA302 they must provide:

  • Tax Year Overview – a HMRC document confirming the amount of tax due to be paid.
Criteria Proof required
Sole traders
We will consider the average net profit over the last 2 years. However, if the latest year is lower than the average, that figure will be used.

The last 2 years' signed audited or certified accounts, the most recent of which must be no more than 18 months old.

Plus, a minimum of the last 3 months' commercial bank statements to ensure the business is still trading at a similar level to that seen within the accounts.
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' signed audited or certified accounts, the most recent of which must be no more than 18 months old.

Plus, a minimum of the last 3 months' commercial bank statements to ensure the business is still trading at a similar level to that seen within the accounts.
Partnerships
We will consider the customer's share of the net profit averaged over the last 2 years. However, if the latest year is lower than the average, that figure will be used.

The last 2 years' signed audited or certified accounts, the most recent of which must be no more than 18 months old.

Plus, a minimum of the last 3 months' commercial bank statements to ensure the business is still trading at a similar level to that seen within the accounts.
Limited liability partnerships
Limited Liability Partnership category guide:
Category 1 = LLP with 200 or more partners
Category 2 = LLP with between 20 and 199 partners
Category 3 = LLP with less than 20 partners
For partners of category 1 LLPs, a letter issued by the company Finance Director or accountant will be accepted as confirmation of income. The letter should detail the applicant's earnings over the past 2 years and must be dated within 3 months of the application.

For partners of category 2 LLPs, a letter issued by the company Finance Director or accountant and tax returns with SA302s will be accepted as confirmation of income. The letter should detail the applicant's earnings over the past 2 years and must be dated within 3 months of the application, and the tax returns with SA302s must be for the latest 2 years.

For Category 3 LLP partnerships cases, if the accounts do not show the shareholding of the customer(s), additional confirmation should be sought by obtaining 2 years tax returns and one of the following:
  • a letter from the Finance Director
  • a letter from the accountant of the LLP
  • a copy of the partnership agreement to confirm shareholding in addition to seeing the financial accounts
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 by obtaining P60s. For time served as a LLP partner, income can be evidenced in accordance with the LLP Category Guide above. 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 LLP accounts (subject to LLP Category Guide above)
Company Director with more than 10 per cent shareholding
Where a limited company director applying for a mortgage has more than a 10 per cent shareholding in the company, they 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 with the latest two years' audited/certified accounts and/or HMRC Tax Returns and Tax Calculations, together with pay slips and P60. Company Directors with 10 per cent or less shareholding in the company will be classed as employed, applying employed policy for assessing income.
Sub-contractors
We will consider the applicant's employment track record, current contract term and likelihood of continued employment.

Where a sub-contractor works via an umbrella company receiving PAYE income, we will consider the longevity of the income stream.

Either: audited/management accounts; or pay slips showing pay received and tax deducted at source.

Plus, Self-Assessment Tax Returns if the income has been validated by HMRC and has formed the basis upon which the applicant has paid tax via an HMRC SA302 Self-Assessment Tax Calculation.
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
Fixed-term contracts
Applications will be considered from customers employed under fixed term contracts where they have been employed for a minimum of 2 years in the same type of employment, as evidenced by 2 years P60s and past history suggests that their current contract is likely to be renewed. Evidence of income must be provided in line with the Evidencing Income policy.

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

Last 2 years' P60s and tax returns
Zero-hours contracts
Customers on a zero-hour contract can be accepted where they can evidence that their income is current, regular and consistent. The customer must have been in the same type of employment for a minimum of 24 months, as evidenced by 2 years P60s. If there are any concerns with the information provided further evidence must be obtained from the customer.

2 years' P60s

The average of the last 3 months (or last 12 weeks where the customer is paid weekly) basic income can be used, however if the latest month is lower than the average then the latest month's income must be used in the affordability assessment.

Salary credits received to show customers stated employer and credit should have been received within 35 days of the application date.

Any bonus, overtime or commission must be evidenced in line with the Bonus / Overtime / Commission policy.
Disabled Applicants
Disabled applicants whose principal income consists of Disability Living allowance / Personal Independence Payment (PIP), Industrial Injuries Disablement Benefit and Income Support can sometimes encounter difficulties when seeking mortgage finance. HSBC recognise that such customers may have special requirements and a flexible and non-discriminatory approach will be followed to allow such applications to be considered fairly and equally.

Disability allowances and income support can be accepted in gross income calculations where these are of a long term nature and have been confirmed by the Department of Social Security (DSS) for Work and Pension (DWP).
Criteria Proof required
Investment income
Investment income will be considered by the bank where the investment is deemed credible and can be evidenced by 2 years Tax returns and portfolio statements.

Reference will be made to the Interest Only Acceptable Repayment Strategies matrix for acceptable investment types, applying the same ratios for calculation.

The bank will not accept any form of speculative investment as an income source for any reason.

2 years Tax returns and portfolio statements.
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.
  • Having four or more BTL mortgaged properties in aggregate at the end of the application (E.g. Purchase applications will be acceptable if the customer currently has 2 or less mortgaged properties. Non purchase applications will be acceptable if the customer currently has 3 or less mortgaged properties).
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.
  • Mortgage bank statement(s) to show BTL borrowing outstanding.
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.

For customers with existing BTL properties who are applying for a mortgage to purchase/remortgage a residential property for their own use, please ensure the request passes a 'makes sense' test (i.e. - is the property being purchased/remortgaged in line with the customer's profile).
Maintenance income
100% is acceptable, providing there is a court order in place.

A copy of the maintenance agreement received under a Court Order or a CSA assessment.
Trust income
100% is acceptable, providing it covers the full term of the mortgage.

Letter from trust administrator, plus a statement of where the trust is invested.
Foster income
100% of net profit averaged over 3 years is acceptable.

Last 3 years' tax returns.
Private pension
100% is acceptable

Either: the latest annual statement of pension due on retirement; or the latest letter, payslip or P60 from the pension provider.
State pension
100% is acceptable, providing it is already being received.

Latest annual pension statement or P60.
Permanent health insurance
100% is acceptable, providing it covers the full term of the mortgage.

Latest benefit award letter, dated within the last 12 months.
Income after retirement
As a responsible lender, we will only lend to or beyond the applicant's intended retirement age or age 75 (whichever is sooner) provided they can demonstrate they will continue to receive sufficient income for the term of the mortgage.

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 beyond age 75 or the customer's intended retirement age, please contact the intermediary helpdesk for details of the income evidence required.
Income from benefits
Benefit income in the form of Child Benefit, Working Family Tax Credit and Child Support Agency Awards can only be used where these are evidenced to be assured and regular and must be evidenced over the term of the mortgage.

3 months bank statements and/or the Department for Work and Pensions (DWP) statement/letter of confirmation.

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 above 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.
  • Jobseekers allowance
  • Maintenance income without a court order
  • Bursary income
  • Mortgage subsidy
  • Lodgers 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

To help us assess expenditure and establish a fuller financial picture, each applicant must provide copies of their most recent 3 months' bank statements for all non-HSBC current accounts. They will also need to provide statements for any HSBC international, HSBC Offshore and HSBC Expat accounts. There's no need to provide statements for HSBC and first direct accounts as we have access to those.

When considering affordability we assess expenditure based on a mixture of customer declared information and/or details sourced from the Office of National Statistics (ONS). The ONS modelled data used in the application takes into account the:

  • Number of applications
  • Number of financial dependents
  • Applicant income
  • Region
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. Supporting evidence must be obtained from the applicant and/or Credit Reference Agency Search and will be retained in the mortgage file.

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 and mortgage bank statements to show the Buy to Let borrowing outstanding. 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.

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.
  • Buy to Let leasehold properties must have more than 35 years remaining on the lease beyond the term of the mortgage at the outset.

We will not provide residential or Buy to Let Mortgages 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.

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 same LTV limits apply to flats as to houses.

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.

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
  • Properties with an annexe or granny flat
  • 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

Period timber frame properties will be considered on individual merit, subject to the valuer's comments and at the lower LTV ratio of 80%.

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

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 and Hawthorn Leslie steel frames with boarded finish are 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

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.

Where both properties are mortgaged with HSBC, they will each have a maximum LTV of 80 % (subject to repayment type/borrowing amount LTV maximum).

Where the main residence is mortgaged elsewhere, the property being mortgaged to HSBC will still be limited to 80% LTV, regardless of the LTV on the other property.

The second property can only be used by the applicant and their immediate family. It must not be let on an assured shorthold tenancy or as a holiday let.

If the applicant has a mortgage on their main residence, the income multiple/affordability calculation needs to cover both mortgages and must include council tax, utility, insurance and property maintenance bills relating to both properties.

Home for dependent relative

We can provide mortgages for properties for dependent relatives. The same criteria apply as outlined above for second properties.

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, flats and FTBs)
  • 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:

  • NHBC
  • Zurich Municipal - please note: although Zurich Municipal has now withdrawn from the market, we will continue to receive and accept their policies/warranties
  • Premier Guarantee
  • Local Authority Building Control (LABC) New Home Warranty
  • Building Life Plans (BLP)
  • CRL Management Ltd plus existing: Warranties from Construction Register Ltd dated prior to February 2011 are also acceptable
  • Checkmate Castle 10 Home Warranty
  • Build-Zone New Home Warranty
  • Build Assure 10
  • Build Assure New Homes
  • Global Home Warranties Ltd
  • The Q Policy
  • Protek
  • International Construction Warranties Ltd (ICW)
  • Advantage HCI

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 90%. 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 or professional valuation.

A professional valuation is mandatory in all the following cases:

  • All purchase applications
  • All buy-to-let applications
  • All properties that are isolated, constructed of concrete, listed, unusual or otherwise difficult to value
  • All new build properties
  • All properties that are part business use and part domestic occupation
  • Northern Ireland properties

For remortgage applications, the valuation type will be determined at the point of application – although a professional valuation is mandatory in all the following cases:

  • Where the LTV is more than 80%
  • Where the property is less than 2 years old
  • Where the property is in London or the South East and the value exceeds: £1,000,000 for houses and bungalows or £500,000 for flats and maisonette
  • Where the property is outside London and the South East and the value exceeds £500,000 for houses and bungalows; or £250,000 for flats and maisonettes
Drive-by valuations

A drive-by valuation cannot be used to support HSBC mortgage borrowing.

Existing valuations

An existing valuation will only be considered for further use where:

  • The valuation was undertaken by a surveyor from our current panel within the last 6 months to support HSBC lending; and
  • The proposed borrowing has LTV equal to or less than 70%
Re-inspections/Revaluation

If a re-inspection is recommended by the panel valuer, it will be mandatory.

Valuations for Scotland

In Scotland, the seller of a property has to have a Home Report published when they are looking to sell their home.  The report will contain a Standard Valuation Report which HSBC can use.

The Home Report needs to be dated within the last 3 months and be from a member of our panel of valuers. As long as they meet both of the criteria above, then we will be happy to accept the report and will not need to instruct a valuation of the property.

Valuations for Jersey, Isle of Man, Guernsey and Sark properties

An automated valuation cannot be used to support mortgage facilities offshore – all borrowing requests must be supported by a professional valuation.

Valuations for Northern Ireland properties

An automated valuation cannot be used to support mortgage facilities in Northern Ireland and all borrowing requests must be supported by a professional valuation.

Survey panel

HSBC uses an approved panel of surveyors to carry out a standard valuation to ensure the property we are lending against provides suitable security for a HSBC mortgage.

Applicants purchasing a property have the option to use their own valuer to carry out a homebuyers report or building survey. Alternatively, they can ask us to instruct our approved valuer for a more comprehensive valuation when they visit the property to carry out their standard valuation. See our valuation fees page for details of costs.

Conveyancing options for purchases

For England and Wales all 3 options apply. For properties in Scotland or Northern Ireland, HSBC mortgage customers are required to choose from a HSBC managed panel firm or instruct their own solicitor.

  • HSBC managed-panel firm
    Customers are introduced to one of the current managed panel firms. These solicitors or licensed conveyancers will act for the bank and the borrower, only dealing directly with HSBC or the customer, and will offer fixed fees and will provide a no-sale-no-fee guarantee. Customers can get a quote for the legal work on their chosen property by calling Countrywide Conveyancing Services on 0161 3334605.
  • CQS-accredited or CLC-regulated solicitor or licensed conveyancer firm
    Customers can instruct firms who are not on our managed panel, providing they are a Conveyancing Quality Scheme (CQS) member or are regulated by the Council of Licensed Conveyancers (CLC). These firms 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 CQS solicitors and CLC 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 is not CQS-accredited or CLC-regulated, or a sole-practitioner CQS solicitor or CLC firm to represent them for an application of above £350,000, they will 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 from the HSBC Managed Panel 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.
Solicitors for remortgages

We outsource the processing of the legal requirements for the following cases to a third party solicitor/conveyancer on the Legal Marketing Services (LMS) managed panel:

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

LMS 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. LMS will not discuss progress directly with intermediaries, if you have any questions you can contact HSBC for an update.

Customers are not required to have their own legal representation on a remortgage. However, the customer can appoint their own legal representation if they wish to have independent advice but their legal representative will not be able to undertake any aspects of the legal processing for the remortgage. If the customer does appoint their own legal representative for this, the customer will be responsible for any associated legal costs.

Where there is additional legal work attached to the remortgage application, the customer will need their own legal representation. The customer can choose to either:

  • Also appoint LMS 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 (470KB).
  • Appoint a different solicitor/licensed conveyancer to act on their behalf for the additional legal work, with LMS panel 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 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 will charge the customer a fee for this service which is the same as the legal fee charged if the customer appointed LMS, please see our 'Legal fees for remortgaging to HSBC' PDF: This PDF opens in a new window (470KB) for details. This applies regardless of whether the customers appointed solicitor/licensed conveyancer is CQS, CLC accredited or has neither accreditation.

The LMS panel firm will discuss the legal requirements, options and all associated fees for the any additional legal work with the customer(s) directly, they will not be able to discuss this with intermediaries, if you have any questions you can contact HSBC for an update. This will allow the customer(s) to make an informed decision. 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

Product

The minimum term that we offer is 5 years.
The maximum term is 25 years for interest-only loans and 30 years for capital repayment loans.

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

Loan amount Capital repayment maximum LTV Interest-only maximum LTV
Up to £400k 90% 75%
Over £400k 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.

Further advances as stand alone applications via HSBC for Intermediaries are only available when linked to a re-mortgage from another lender. Further advances as stand alone applications are available via our branch network and over the phone. 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.

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.

We need to confirm and document the source of an applicant's deposit and will be unable to complete the mortgage without this information. Whether evidence of deposit is required will be considered on a case-by-case basis.

Developer-gifted deposit
Any incentives provided by a developer should be discounted from the purchase price. We can only lend up to the maximum allowable LTV of the discounted purchase price or valuation. Minimum deposit from applicant is 10%.

Vendor-gifted deposit
Any incentives provided by the vendor should be discounted from the purchase price. We can only lend up to the maximum allowable LTV of the discounted purchase price or valuation. Minimum deposit from applicant is 10%.

Family-gifted deposit
Where the deposit has been 'gifted' by a parents or another family member, you must make the applicant(s) aware that the acting solicitor/conveyancer will need to obtain a letter from the donor stating that the deposit is: 'non-refundable and an unconditional gift and that no interest is claimed or will be claimed in the property'. If this written confirmation cannot be obtained, a Letter of Consent will be required.

Declaration of trust
If a family member or third party 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 may ask for changes to be made to protect our interest in the property. We will also require a Letter of Consent to be signed by the contributor. Please notify us as soon as possible to prevent any delays in completion.

Second charge
If a family member or third party is contributing towards the purchase price and wishes to protect their beneficial interest by way of a second charge, we don't need to see the charge form but our consent must be obtained. Please notify us as soon as possible to prevent any delays in completion.

Family loan as a deposit
If the deposit is provided by a family member as a loan to be repaid, please ensure the monthly repayments are included in the affordability assessment.

Unsecured loan as a deposit
We can only accept an unsecured loan as a deposit if it comes from another lender - HSBC personal loans cannot be used. Where a personal loan is being used for a deposit, please ensure all relevant costs are included in the affordability assessment.

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.

Acceptable repayment vehicles

  • Sale of an additional home or a buy to let property in the UK– whether mortgaged or owned outright
  • Endowment policy
  • Cash savings
  • Other investments
  • Variable income such a bonuses (only accepted as a partial repayment strategy)

For more details, please see Interest Only Repayment Strategies.

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

  • Sale of 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 6 months. Where a case is still be assessed after the offer has elapsed, we may consider extending offers on a case-by-case basis. Please call the helpdesk for more details.

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 when linked to a remortgage, subject to customers meeting the following requirements:

  • maximum of £30,000 and
  • a maximum LTV of 80%, or 75% 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 £30,000 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. 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 or BTL mortgage 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
  • 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%.

Foreign currency income and residency must be captured if the customer is paid or lives in a foreign currency or country. 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 3.69%.

Existing borrowers

If a customer wishes to temporarily let part or the whole of their property, please ask them to contact us as they must obtain our consent in accordance with the requirements of our legal charge. We will only consider requests from customers who have had their HSBC mortgage for at least 6 months.

A typical example of an acceptable request would be from a customer who will be working abroad or who is in the Armed Forces and absent on active service.

If consent to let is granted, it will be for a maximum of 12 months at a time. The tenancy agreement must be an assured shorthold tenancy agreement for a maximum of 12 months. The customer needs to know that they will not be able to switch their rate or apply for a new rate whilst the property is let – even if they have a fixed rate that expires during that period.

If the customer no longer intends to occupy the property and wishes to let it permanently, the existing lending will no longer qualify as a residential mortgage.

Porting of HSBC mortgages is not currently available via HSBC for Intermediaries. Please ask your customer to contact us directly.

We do not currently offer loans to homeowners for home improvement purposes via HSBC for Intermediaries, unless they are linked to a remortgage from another lender. We offer homeowner loans directly to our customers in our branches and over the phone.

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.

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, no standard valuation fee and no completion fee.

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 once the loan has been approved, alternatively a partial payment can be made and the remainder of the booking fee added to their loan.

Applicants who choose to add part of the booking fee to their mortgage instead of paying it in full at the outset, would need to pay £99 once their application has been approved (for booking fees of £999 or less), with the remaining balance of the booking fee added to their loan. Where the booking fee is greater than £999, the customer would need to pay £249 once their application has been approved with remaining balance of the booking fee added 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.

When you submit an application on behalf of an applicant, we'll ask you how the booking fee will be paid. If it's payable from an HSBC account, please advise which account number and sort code it can be debited from. If it's payable from a non-HSBC account, your customer will need to call us to make a payment after their application has been approved so we can issue the mortgage offer.

Please note a booking fee will only be refunded if a valuation proves to be unsatisfactory; approval is declined for an application agreed in principle or in the event of death before the mortgage is drawndown.

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.

If a professional valuation report is required, a standard valuation fee is payable and will be collected by the valuation supplier that we instruct.

For more on when a professional valuation is required, see the valuations section. To find out how much your customer might pay, see our valuation fees page.

If your customer requests a Homebuyer Report, the fee will be collected by the report supplier that we instruct. It is subject to a separate contract between the applicant and the valuation supplier. To find out how much your customer might pay, see our valuation fees page.

If your customer requests a building survey to be carried out, the fee will be collected by the survey supplier that we instruct. It is subject to a separate contract between the applicant and the valuation supplier. To find out how much your customer might pay, see our valuation fees page.

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 lifetime 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.

This website is for the use of FCA authorised mortgage intermediaries only.

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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