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InterBay Secured Loans: For Property Investors and Landlords

InterBay Commercial is the OSB Group specialist second charge lender for buy-to-let, semi-commercial and commercial property. Ideal for professional landlords and property investors who need to release equity for portfolio growth. Broker-only access.

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InterBay’s specialist BTL and semi-commercial focus

InterBay is not a residential second charge lender. Its bread and butter is lending against investment property — BTL houses and flats, HMOs, multi-unit freehold (MUFB) blocks, and semi-commercial units where part of the property is residential and part is commercial. For professional landlords with 4+ properties who qualify as portfolio landlords under PRA rules, InterBay is one of the most-used second charge lenders in the market.

The core product is a second charge on a BTL or semi-commercial property, often used to release equity for the deposit on the next portfolio acquisition, to fund refurbishment or extension works, or to consolidate more expensive business debt. Rates are typically lower than consumer second charges because BTL is commercial-regulated (unless the BTL is accidental or consumer BTL) and the underwriting is asset-based.

Access is strictly through FCA-authorised master brokers with commercial permissions. Consumer brokers cannot usually access InterBay directly — the case needs a specialist BTL broker.

Eligibility criteria for InterBay

InterBay’s 2025 criteria reflect its commercial-investment focus:

Because InterBay is commercial in nature, personal affordability is less central than for a consumer second charge — the rental income of the security property is the key stress.

Rates, fees and worked examples

InterBay pricing in 2025 ranges from around 7.9% APRC at the cleanest BTL end up to 11% for HMO or semi-commercial cases. Arrangement fees are typically 2% to 3% and added to the loan. Three illustrative scenarios:

ScenarioProperty valueLoanTermAPRCMonthly
Single BTL, individual landlord£280,000£50,00020 yrs8.4%£431
HMO, 5-bed, Ltd Co£450,000£120,00015 yrs9.2%£1,228
Semi-commercial (retail + 2 flats)£650,000£200,00020 yrs10.1%£1,947

Because InterBay lending is often part-interest-only or full interest-only on BTL cases, monthly payments are significantly lower than comparable capital and interest products. This is standard for BTL and designed to allow the landlord to service the debt from rental income. The trade-off is that the capital is not amortised, requiring an exit strategy — usually sale or refinance at term end.

Application process and portfolio underwriting

An InterBay second charge is a commercial lending transaction and the process reflects that:

  1. Fact find: landlord CV, portfolio schedule (all properties, values, rents, mortgages, lenders), 2 years of SA302s or limited company accounts, personal and business bank statements.
  2. Asset and liability statement: comprehensive statement of personal and business net worth.
  3. Soft-footprint DIP: indicative terms based on property type, LTV and rental cover.
  4. Full application: hard search and underwriting; for portfolio landlords, full portfolio stress testing per PRA rules.
  5. Valuation: physical valuation is standard for BTL second charge, covering achievable market rent, building condition and saleability.
  6. First charge consent: required from your existing BTL lender.
  7. Legal pack: InterBay uses specialist commercial solicitors; your side should too.
  8. Completion: charge registered at HM Land Registry, funds released.

Typical timescale is 6 to 10 weeks — slower than a residential second charge because of the commercial legal work and portfolio underwriting. For a portfolio landlord case, build in 3 months end-to-end to be safe.

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Alternatives: Paragon, Shawbrook, Together, Precise

InterBay’s direct competitor set in the BTL and semi-commercial second charge market includes:

For a portfolio landlord case, the right lender depends heavily on property type, rental coverage, taxpayer status (higher rate stress is tougher) and the Ltd Co vs personal ownership structure. A specialist commercial broker running 3 to 5 lenders in parallel will identify the best combined rate, fees and criteria fit, documenting the recommendation under Consumer Duty where the BTL is consumer-regulated.

Regulatory framework: FCA, PRA and commercial BTL

The regulatory position for InterBay lending depends on the nature of the borrowing:

For commercial BTL cases, you do not get the consumer protections of MCOB — no mandatory ESIS, no 7-day reflection, no FOS. Instead, you are negotiating a commercial contract under contract law. This is one reason specialist legal advice is essential. OSB Group is PRA-regulated, which provides prudential oversight of InterBay’s capital and liquidity regardless of whether the individual borrower is consumer or commercial.

Tax, Section 24 and portfolio considerations

Tax treatment is central to any BTL second charge decision. For individual landlords on personally-held residential BTL, Section 24 finance cost restriction caps interest relief at the basic rate of income tax. This made high-rate BTL investors materially less profitable post-2017 and drove many into limited company structures. Interest on a limited company BTL mortgage is a fully allowable business expense, which preserves full relief — so the structure you borrow in matters significantly.

Semi-commercial property is treated differently: commercial elements are not subject to Section 24 and can qualify for a mix of tax treatments depending on use. For semi-commercial second charges, the cost of interest is usually fully deductible against the commercial rental income.

Portfolio stress testing under PRA rules requires landlords with 4+ properties to demonstrate sustainable affordability across the whole portfolio. InterBay will model this as part of the application and may decline cases where aggregate portfolio gearing or stress coverage is weak. A qualified accountant or specialist tax adviser should be consulted before drawing a second charge to grow the portfolio — the tax and cashflow implications can materially change the case.

Common pitfalls on InterBay BTL second charges

InterBay BTL cases fail for reasons different from residential second charges:

An experienced BTL second charge broker will run pre-flight checks on rental coverage, portfolio stress and property type before instructing valuation, saving significant aborted-case cost.

Important: Your home may be repossessed if you do not keep up repayments on your mortgage. There will be a fee for mortgage advice. The actual rate available will depend on your circumstances. Think carefully before securing other debts against your home.

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Frequently Asked Questions

InterBay Commercial is a specialist UK lender within OSB Group plc, the FTSE 250 challenger bank also home to Precise Mortgages, Kent Reliance and Clearly Loans. InterBay focuses specifically on non-standard property lending: buy-to-let, HMOs, multi-unit freehold blocks, semi-commercial and commercial investment property. It is one of the most active second charge lenders for professional landlords and property investors in the UK market. Being part of a PRA-regulated banking group gives InterBay bank-grade capital, governance and funding stability, while its commercial focus delivers specialist expertise that pure residential lenders cannot match. Access is through FCA-authorised master brokers with commercial permissions.
No. InterBay Commercial focuses exclusively on investment property — buy-to-let, HMOs, multi-unit freehold, semi-commercial and commercial. It does not lend on residential owner-occupied homes. For a residential second charge, your broker will direct you to sister brand Clearly Loans or Precise Mortgages within OSB Group, or to external residential lenders like Shawbrook, Aldermore, United Trust Bank, Pepper Money or Bluestone depending on your profile. If you own a property that mixes owner-occupation with rental (for example, a house with a lodger or a short-term let), the treatment depends on proportion and your broker will advise which lender fits.
InterBay applies PRA-standard rental coverage stress tests. For basic-rate taxpayers and limited company landlords, the stress is typically 125% interest coverage ratio at a notional stressed rate (typically 5.5% or the product rate plus 2%, whichever is higher). For higher-rate taxpayers on personally-held residential BTL, the stress tightens to 145% ICR because of the Section 24 interest relief restriction. For HMOs and multi-unit blocks, InterBay will use the achievable market rent as assessed by the valuer, not the actual current rent. This can be conservative on older tenancies at below-market rents, which is one of the most common reasons BTL second charge cases fail to reach the requested loan size.
Yes — InterBay Commercial is part of OSB Group plc, which is authorised and regulated by both the PRA and the FCA. However, the protections that apply to individual borrowers depend on the nature of the lending. For consumer BTL (accidental landlords), full FCA MCOB rules apply — ESIS, 7-day reflection, FOS access. For business BTL (professional landlords), limited company BTL and commercial investment, the lending is commercial and not consumer-regulated, though InterBay itself operates under FCA permissions. This distinction matters because commercial BTL borrowers do not have statutory reflection periods or FOS access. Specialist legal advice is essential on commercial second charges.
Yes. HMO (Houses in Multiple Occupation) lending is a core InterBay specialism. The lender accepts licensed HMOs, typically 5 to 8 beds, as security for second charge lending. Rental stress testing uses the achievable market rent across the rooms, not aggregate household rent. Valuation is physical and typically considers both bricks-and-mortar value and investment value, with the lower usually used for LTV. Large HMOs above 8 beds may be referable or fall to InterBay’s commercial product range. HMO cases take slightly longer to complete than single-let BTL because of the additional valuation and licensing checks, and the broker should confirm the HMO licence is in place and current at application.
Yes, this is one of the most common reasons to take a second charge with InterBay. Professional landlords often release equity from an existing portfolio property via a second charge to fund the deposit and stamp duty on the next acquisition — effectively using existing equity as the war chest for portfolio growth. This is often more efficient than remortgaging the full balance, particularly if the existing first charge is in a low-rate fixed deal you do not want to break. The second charge funds can be used as deposit, with a separate first charge on the new property at 75% LTV. Your BTL broker will model the combined stress test across both properties.
Paragon Bank and InterBay overlap heavily in the BTL second charge space. Paragon is typically stronger for larger portfolios and very experienced landlords, with well-developed portfolio lending platforms. InterBay is often more flexible on semi-commercial and unusual property types, leveraging its OSB Group commercial expertise. On single BTL for straightforward individual landlords, pricing is usually similar — within 25 basis points between the two. For HMOs, semi-commercial and complex portfolio cases, running both in parallel is the right approach. A specialist BTL broker with access to both will identify which lender best fits your specific structure, property type and tax position.
Typical InterBay fees include: an arrangement fee of 2% to 3% (usually added to the loan), a valuation fee (payable upfront, varying with property type — from around £400 for a single-let BTL up to £2,000+ for a complex semi-commercial valuation), legal fees (InterBay uses specialist commercial solicitors and expects you to use equivalent; budget £1,500 to £3,000), and possibly a CHAPS or completion fee. Broker fees are typically 1% to 2% of the advance, disclosed upfront under FCA Consumer Duty rules. Early repayment charges usually apply for 3 to 5 years, tapering over the period. Always add these into the total-cost comparison when benchmarking against alternatives.

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