Interbay Commercial

Interbay Commercial is a specialist lending brand within the OneSavings Bank (OSB) Group, one of the UK's leading specialist mortgage lenders. The brand was developed to serve a specific and often underserved segment of the commercial property market: semi-commercial and mixed-use properties that sit between traditional residential and fully commercial lending. This focused positioning has made Interbay Commercial a go-to lender for brokers and borrowers dealing with the particular challenges and opportunities that mixed-use properties present.

OneSavings Bank, Interbay Commercial's parent company, was founded in 2011 when JC Flowers & Co acquired the Kent Reliance Building Society's lending business. Since then, OSB Group has grown significantly through organic growth and strategic acquisitions, building a portfolio of specialist lending brands that serve different market segments. The group listed on the London Stock Exchange in 2014 and merged with Charter Court Financial Services in 2019, creating one of the UK's largest specialist lending groups. This institutional backing gives Interbay Commercial the capital strength and operational infrastructure of a major lender while maintaining the specialist focus and agile decision-making of a dedicated commercial team.

Interbay Commercial's core proposition centres on semi-commercial and mixed-use property finance. These are properties that combine commercial use on one or more floors — typically retail, office, or light industrial — with residential accommodation on other floors. Common examples include shops with flats above, office buildings with a residential penthouse, pubs with letting rooms, and converted buildings where the ground floor is used for commercial purposes and upper floors contain residential flats. These properties present unique underwriting challenges because they fall between the standard criteria of residential and commercial lending, requiring lenders to assess both the commercial income stream and the residential element simultaneously.

Interbay Commercial has developed specific expertise in navigating these complexities. The lender's underwriters understand how to value mixed-use properties, how to assess combined rental income from commercial and residential tenants, and how to structure facilities that reflect the hybrid nature of these assets. This expertise extends to understanding the planning and regulatory framework that applies to mixed-use properties, including the implications of different use classes, permitted development rights, and the interaction between residential and commercial tenancy law.

The lender provides commercial mortgages for semi-commercial properties from £50,000 to £3 million, with loan-to-value ratios of up to 75%. Terms of up to 25 years are available, with both fixed and variable rate options. Interbay Commercial assesses affordability based on the combined rental income from all elements of the property, applying appropriate rental coverage ratios that reflect the different risk profiles of commercial and residential tenants. This blended approach often results in more favourable assessments than lenders who apply purely commercial criteria to the entire property.

Beyond semi-commercial properties, Interbay Commercial also provides finance for fully commercial properties including offices, retail units, industrial premises, and other standard commercial asset classes. However, the lender's particular competitive advantage lies in the mixed-use space, where its specialist knowledge and bespoke underwriting deliver better outcomes than generalist lenders. For straightforward commercial properties, Interbay Commercial offers competitive terms but faces more direct competition from the broader commercial lending market.

Interbay Commercial lends to individuals, limited companies, SPVs, LLPs, and partnerships, providing flexibility in how borrowers structure their property ownership. The lender is experienced in assessing borrowers who hold properties in corporate structures for tax planning purposes and understands the particular documentation and guarantee requirements that apply to company borrowing. For portfolio landlords who hold a mix of residential and semi-commercial properties, Interbay Commercial can assess applications holistically, considering the borrower's overall property portfolio and financial position rather than each property in isolation.

The lender's typical interest rates for semi-commercial mortgages start from around 5.75%, reflecting the specialist nature of the lending. Rates vary depending on loan-to-value ratio, property type, the proportion of commercial versus residential income, tenant quality, and the borrower's overall financial strength. Fixed-rate periods of two, three, and five years are available, with variable rates linked to a reference rate. Arrangement fees are typically 1% to 2% of the loan amount, with valuation fees and legal costs charged separately.

One of Interbay Commercial's particular strengths is its understanding of the valuation challenges that semi-commercial properties present. Mixed-use properties are often difficult to value because there are fewer directly comparable transactions than for standard residential or commercial properties. Interbay Commercial works with a panel of valuers who have specific experience in valuing mixed-use assets and who understand the lender's approach to assessing these properties. This reduces the risk of valuation issues causing delays or problems during the application process — a common frustration for borrowers dealing with lenders whose valuers are less experienced in this property type.

The application process with Interbay Commercial is designed to be straightforward and broker-friendly. Initial enquiries are assessed quickly, with indicative terms typically provided within 24 to 48 hours. The lender's broker development managers provide support throughout the process, helping to identify potential issues early and ensuring that applications are properly prepared before formal submission. Documentation requirements include proof of income, property details including lease information for any tenanted elements, identification, and evidence of deposit funds. For company borrowers, accounts and corporate documentation are also required.

Interbay Commercial benefits from the OSB Group's robust operational infrastructure, including its experienced legal and compliance teams, established valuer panel, and efficient processing systems. This operational strength means that despite being a specialist lender, Interbay Commercial can process applications with the efficiency and reliability that borrowers expect from a major financial institution. Completions for straightforward semi-commercial mortgages typically take six to eight weeks from formal application.

For borrowers working with Commercial Mortgage Broker, Interbay Commercial is frequently recommended for mixed-use and semi-commercial properties where its specialist knowledge delivers genuinely better outcomes than generalist alternatives. The lender's understanding of how to assess combined income streams, its experienced valuer panel, and its pragmatic underwriting approach make it a reliable choice for a property type that many other lenders find difficult to assess. Our relationship with Interbay Commercial's underwriting team enables us to present cases in the format they prefer and anticipate any potential issues before they arise, resulting in smoother transactions and better terms for our clients.