Commercial Mortgage

If the property is not for your own business use, this would be classified as Real Estate (property-based) Lending where repayment is reliant on third party rental income or property re-sale, such as:

1. Investment Property – borrowing is taken to purchase, make alterations, improvements, or repair to a commercial or residential property which is not owner occupied.
2. Property Construction or Development – borrowing is taken to fund the construction or redevelopment of a commercial or residential property which is intended to be sold or rented to a third party upon completion.

Real Estate remains a sector where we only have credit appetite for businesses with a trading turnover of above £15 million. For more information, please visit Real Estate Finance | Sector Teams | HSBC UK

Interest rates are charged as a margin over a currency reference rate (for example Bank of England Base Rate, near Risk Free Rates (RFRs) such as Sterling Overnight Index Average (SONIA), USD LIBOR or the cost of funds for fixed interest rate loans.

• Variable rate¹ – you pay an agreed interest rate margin, which is added to reference rates such as the Bank of England Base Rate or a RFR. This allows you to benefit if interest rates fall, but could leave you exposed to increased repayments if rates rise.
• Fixed rate² – you have a fixed payment amount so you can be sure of the amount of your repayments for the fixed term. Maximum fixed rate period is 10 years.

* Non-sterling currencies, Risk Free Rate (RFR) linked facilities, such as SONIA, SOFR, TONAR or SARON and USD LIBOR are subject to eligibility criteria and only available to businesses with turnover of £25m or above. Contact your relationship manager for further information.

* For variable rate linked facilities, the maximum limit is £25m. For fixed rate loans, the maximum limit is £10m.
**An arrangement fee may be payable. This will be individually negotiated on a case-by-case basis
*** Missed repayments on your mortgage can affect your credit rating and your property may be repossessed

If the loan is repaid early, a prepayment fee will be payable

1. If the loan is repaid early, a prepayment fee will be payable and if you repay the loan within a fixed rate period, you will also have to pay a fixed rate break fee.
2. Variable debit interest is payable on your loan and tracks the Bank of England Base Rate which is subject to change. If the Bank of England Base Rate falls below zero, we will treat it as zero.
3. £1m is the minimum amount available for variable, non-sterling currencies, RFR and USD LIBOR linked loans. Availability is subject to eligibility criteria and only available to businesses with turnover of £25m or above. If the RFR for any day, or USD LIBOR for any interest period is less than zero, the RFR or USD LIBOR for that period shall be deemed to be zero.
4. Deferring capital repayments will increase the total interest charged and therefore the total amount payable over the full term of the loan. Following a capital repayment holiday, your repayments will be higher to ensure your loan will be repaid by the end of the term.
5. Security - A first legal charge is needed over the premises being bought or refinanced. A fee will be payable for taking this security and we will give you an estimate of this cost at the outset. External charges may also apply, please discuss with your Relationship Manager for further information.