How much can you borrow with a commercial mortgage? In the UK, commercial mortgage lenders commonly offer around 60% to 75% of a property’s value, although some lenders may consider higher loan to value ratios of up to 80% for eligible borrowers. The amount you can borrow depends on the property’s value, your deposit, business finances, rental income and the lender’s criteria.
For example, if you want to purchase a commercial property worth £500,000, a lender offering 70% loan to value could potentially provide a mortgage of £350,000. You would need to contribute the remaining £150,000 as a deposit, plus any applicable fees and purchase costs.
However, the maximum amount a lender is willing to offer is not necessarily the amount you can afford to borrow. Commercial mortgage lenders also assess whether the business can support the repayments or whether the rental income from an investment property can cover the borrowing.
Whether you are buying an office, warehouse, retail unit or commercial investment property, understanding how lenders calculate borrowing limits can help you plan your purchase and identify suitable finance options.
In this guide, we explain how much you can borrow with a commercial mortgage, how loan to value works, what deposit you may need, how lenders assess affordability and what you can do to prepare for an application.
What Is the Maximum You Can Borrow With a Commercial Mortgage?
There is no single maximum commercial mortgage amount that applies to every borrower.
Some lenders offer smaller commercial mortgages, while specialist lenders and larger commercial finance teams may consider substantial loans for suitable properties and borrowers.
The amount available depends on factors such as:
- The property’s value
- The lender’s maximum loan to value ratio
- Your deposit or available equity
- Business profitability and cash flow
- Rental income for investment properties
- Your credit history
- The property type and location
- The proposed mortgage term
- The purpose of the borrowing
For example, Allica Bank advertises commercial mortgage borrowing of up to £15 million, while Shawbrook offers commercial mortgage facilities across a range of loan sizes, subject to its lending criteria. These are examples of individual lenders’ products, not a universal market limit.
The right borrowing amount will therefore depend on the property and the financial circumstances of the applicant.
How Much Can You Borrow Based on Property Value?
One of the main factors affecting commercial mortgage borrowing is the property’s value.
Lenders use a calculation called loan to value, commonly shortened to LTV.
LTV shows how much of a property’s value is being financed by the mortgage.
What Is Loan to Value?
Loan to value is calculated by dividing the mortgage amount by the property’s value and multiplying the result by 100.
Formula:
LTV = Mortgage Amount ÷ Property Value × 100
For example:
- Property value: £600,000
- Mortgage amount: £420,000
- LTV: 70%
This means the lender is providing 70% of the property’s value, while the borrower contributes the remaining 30% through a deposit or existing equity.
Commercial mortgage lenders commonly consider LTV alongside affordability, property suitability and the borrower’s financial position.
Commercial Mortgage Borrowing Examples
The following table illustrates how different LTV percentages affect the amount you could potentially borrow.
| Property Value | Mortgage at 60% LTV | Mortgage at 70% LTV | Mortgage at 75% LTV |
| £200,000 | £120,000 | £140,000 | £150,000 |
| £300,000 | £180,000 | £210,000 | £225,000 |
| £500,000 | £300,000 | £350,000 | £375,000 |
| £750,000 | £450,000 | £525,000 | £562,500 |
| £1,000,000 | £600,000 | £700,000 | £750,000 |
| These figures are illustrative calculations, not lending offers. The actual amount available may be lower if the lender’s affordability assessment or property criteria limit the borrowing. |
How Much Deposit Do You Need for a Commercial Mortgage?
The deposit depends on the lender’s maximum LTV and the type of commercial property you want to purchase.
Many commercial mortgage borrowers should plan for a deposit of around 25% to 40%, although some transactions may require a larger contribution. Eligible owner occupied businesses may be able to access higher LTV products, depending on the lender and circumstances.
Here is how the deposit changes at different LTV levels:
| Property Price | Deposit at 60% LTV | Deposit at 70% LTV | Deposit at 75% LTV |
| £200,000 | £80,000 | £60,000 | £50,000 |
| £300,000 | £120,000 | £90,000 | £75,000 |
| £500,000 | £200,000 | £150,000 | £125,000 |
| £750,000 | £300,000 | £225,000 | £187,500 |
| £1,000,000 | £400,000 | £300,000 | £250,000 |
| Remember that the deposit is not the only upfront cost. You may also need to budget for valuation fees, legal fees, arrangement fees, surveys and other transaction costs. |
How Much Can You Borrow for an Owner Occupied Commercial Property?
An owner occupied commercial property is a property that your business uses for its own operations.
Examples include:
- An office used by your company
- A warehouse used for storing stock
- An industrial unit used for manufacturing
- A retail shop operated by your business
- A workshop used for commercial activities
For owner occupied properties, lenders commonly assess the financial performance of the business that will occupy the premises.
They may consider: - Annual turnover
- Profitability
- Cash flow
- Existing business borrowing
- Trading history
- Business bank statements
- The proposed mortgage repayments
The lender needs to establish whether the business can support the mortgage while continuing to meet its other financial commitments.
Some lenders offer higher LTV limits for eligible owner occupied businesses. For example, Allica Bank advertises owner occupied commercial mortgage borrowing of up to 80% LTV, subject to its criteria.
However, a business should not assume it will qualify for the maximum advertised amount.
How Much Can You Borrow for a Commercial Investment Property?
A commercial investment property is a property purchased or owned to generate rental income.
Examples include:
- Offices rented to businesses
- Industrial units let to commercial tenants
- Retail premises leased to retailers
- Warehouses rented to companies
- Commercial buildings with multiple tenants
For investment properties, lenders often place significant emphasis on the rental income generated by the property.
They may consider: - Annual rental income
- Existing tenancy agreements
- Lease length
- Tenant strength
- Property value
- Interest coverage
- The borrower’s financial position
Commercial investment mortgages commonly fall within LTV ranges of around 60% to 75%, although the available amount varies by lender and property.A property with reliable rental income and suitable lease arrangements may be assessed differently from a vacant property or one with uncertain income.
How Do Lenders Calculate Commercial Mortgage Affordability?
Property value is only one part of the calculation.
A lender also needs to establish whether the borrower can afford the proposed mortgage.
The affordability assessment will depend on whether the property is owner occupied or held as an investment.
1. Affordability for Owner Occupied Properties
For owner occupied properties, lenders may examine the business’s financial performance and its ability to meet the mortgage repayments.
They may review:
- Company accounts
- Management accounts
- Business bank statements
- Cash flow forecasts
- Existing debts
- Business operating costs
- Trading history
Some lenders use debt service coverage measures to assess whether the business generates sufficient income to support its borrowing.
A company with stable earnings and manageable existing debt may present a different lending proposition from a business with inconsistent cash flow.
2. Affordability for Investment Properties
For investment properties, lenders may assess whether rental income is sufficient to cover the mortgage interest and other relevant costs.
One measure used in this process is the Interest Coverage Ratio, or ICR.
ICR compares the rental income with the mortgage interest calculated under the lender’s affordability requirements.
For example, if a property generates £60,000 in annual rent and the lender requires rental income to cover interest by 125%, the maximum interest amount supported by that simple calculation would be:
£60,000 ÷ 1.25 = £48,000 per year.
This is a simplified illustration. Actual lender calculations may use different rental income definitions, interest assumptions and affordability requirements. Commercial mortgage lenders commonly assess investment property affordability using rental coverage measures.
Example: How Much Can You Borrow for a £500,000 Commercial Property?
Imagine your business wants to purchase a commercial property valued at £500,000.
You have a deposit of £150,000.
The amount you need to borrow is:
£500,000 − £150,000 = £350,000.
The LTV would be:
£350,000 ÷ £500,000 × 100 = 70%.
If a lender is willing to offer 70% LTV and the business meets its affordability and other lending requirements, a £350,000 commercial mortgage may be possible.
However, if the lender’s affordability assessment supports a smaller loan, the business may need a larger deposit or a different property.
Example: How Much Can You Borrow for a £1 Million Commercial Property?
Now imagine a company wants to purchase a commercial investment property worth £1 million.
The company has a deposit of £300,000 and wants to borrow £700,000.
The proposed LTV would be:
£700,000 ÷ £1,000,000 × 100 = 70%.
The lender would then assess whether the property’s rental income can support the proposed borrowing.
If the rental income is insufficient, the lender may offer a lower loan amount even if the LTV is within its maximum limit.
The company may need to contribute more equity, consider a different property or explore another suitable finance structure.
What Factors Affect How Much You Can Borrow?
Several factors can influence the amount a lender is willing to offer.
Property Value
The lender’s valuation affects the LTV calculation.
If the valuation is lower than the purchase price, the maximum mortgage may also be lower.
For example, if you agree to purchase a property for £500,000 but the lender values it at £450,000, a 70% LTV calculation based on that valuation would produce a maximum of £315,000.
The lender’s valuation methodology and lending criteria determine how the property is assessed.
Deposit or Available Equity
A larger deposit reduces the amount you need to borrow and can lower the LTV.
A lower LTV may improve the range of mortgage options available, although the outcome depends on the lender and the rest of the application.
Business Profitability
For owner occupied properties, lenders may examine whether the business generates sufficient income to support the proposed mortgage.
Strong turnover alone does not guarantee a high borrowing amount. Profitability, operating costs, existing debt and cash flow can also matter.
Rental Income
For investment properties, rental income can influence the maximum borrowing amount.
A property with stronger rental coverage may support a different loan amount from one with lower income.
Credit History
Lenders may review the credit history of the business and, where relevant, its directors or other borrowers.
Credit issues can affect the range of lenders willing to consider an application and the terms available.
Property Type
Different lenders specialise in different types of commercial property.
An office, warehouse, shop, hotel or mixed use building may be assessed under different criteria.
Some property types may require a larger deposit or specialist lending.
Lease Arrangements
For investment properties, lenders may assess the length and terms of the lease, tenant strength and rental payment history.
Short leases, vacant units or uncertain rental income may affect the lender’s assessment.
Existing Borrowing
Existing loans and financial commitments can affect affordability.
The lender may consider the overall debt position of the business or investment borrower rather than assessing the proposed mortgage in isolation.
Can You Borrow 80% of a Commercial Property’s Value?
Potentially, yes.
Some commercial mortgage lenders offer products with maximum LTV limits of up to 80% for eligible borrowers and properties.
For example, Allica Bank advertises owner occupied commercial mortgage borrowing of up to 80% LTV, subject to its lending criteria.
However, 80% LTV is not available for every commercial property or borrower.
The lender may assess:
- Business financial performance
- Property type
- Valuation
- Trading history
- Existing debt
- Affordability
- The purpose of the borrowing
A borrower who needs 80% LTV should confirm whether the property and financial circumstances meet the lender’s criteria before relying on that level of borrowing.
Can You Get a 100% Commercial Mortgage?
Some specialist commercial finance products may offer very high LTV lending to particular professional practices or under specific circumstances.
However, 100% commercial mortgage lending is not a standard option for most businesses.
The availability of such finance depends on the lender, profession, income profile, security and other eligibility requirements.
Most businesses purchasing ordinary commercial premises should plan for a substantial deposit rather than assume that the full purchase price can be financed.
How Much Can a New Business Borrow?
A newly established business may still be able to obtain a commercial mortgage, but the available options can be more limited.
A lender may have less historical financial information to assess, particularly if the business has only recently started trading.
Depending on the case, the lender may consider:
- The directors’ experience
- The business plan
- Available deposit
- Personal or business credit history
- Forecast cash flow
- The property’s suitability
- Existing income sources
- The proposed use of the property
A new business should prepare a clear business plan and realistic financial forecasts before approaching lenders.
How Much Can a Limited Company Borrow?
A limited company can potentially obtain a commercial mortgage to purchase or refinance commercial property.
The amount available depends on the company’s financial position, the property and the lender’s criteria.
For an owner occupied property, the lender may focus on the trading company’s financial performance.
For an investment property, rental income and the company’s property investment structure may be important.
Some lenders may also request personal guarantees from directors or other individuals involved in the transaction.
A limited company should therefore review both the borrowing requirements and the potential personal obligations before proceeding.
Can You Borrow More by Releasing Equity From an Existing Commercial Property?
Potentially.
If you already own a commercial property with available equity, you may be able to raise additional borrowing through a commercial remortgage or another suitable finance arrangement.
For example:
Current property value: £800,000
Existing mortgage: £400,000
Potential new mortgage at 70% LTV: £560,000
Potential additional borrowing: £160,000
This is a simplified illustration. The actual amount available will depend on affordability, lender criteria, valuation and any costs associated with refinancing.
Additional borrowing may potentially be used for business expansion, equipment, refurbishment or another property purchase, subject to lender approval.
If you are considering refinancing an existing property, you can also read our guide on Can You Remortgage a Commercial Property?.
What Documents Do You Need to Support a Commercial Mortgage Application?
Preparing the necessary documents can help lenders assess your application more efficiently.
Depending on the transaction, you may need:
- Company accounts
- Management accounts
- Business bank statements
- Personal financial information for directors
- Details of existing borrowing
- Business forecasts
- Property details
- Purchase price and valuation information
- Lease agreements
- Rental statements
- Business plan
- Details of the deposit
- Information about the intended use of the property
The exact requirements depend on the lender and the type of commercial mortgage.
How Can You Improve Your Commercial Mortgage Borrowing Position?
If you want to maximise the amount you may be able to borrow, consider the following steps.
Prepare Accurate Financial Information
Ensure your accounts and financial records are up to date.
Clear financial information helps the lender understand the business’s income, expenses and existing commitments.
Review Your Deposit
A larger deposit can reduce the required mortgage amount and lower the LTV.
However, you should retain sufficient funds to cover business operating costs and other purchase expenses.
Understand the Property’s Value
Obtain a realistic understanding of the property’s value before relying on a particular borrowing amount.
A lender may use its own valuation when calculating the maximum loan.
Review Existing Debts
Understand how current borrowing affects affordability.
Where appropriate, review whether existing financial commitments can be managed more efficiently.
Prepare a Clear Business Plan
If you are purchasing premises for a growing business, explain how the property supports your operations and how the mortgage will be repaid.
For investment properties, prepare clear information about rental income, leases and expected costs.
Compare Suitable Lenders
Commercial mortgage criteria can vary significantly.
A lender that is suitable for one property type or business may not be appropriate for another.
Reviewing the criteria before submitting an application can help you identify suitable options.
What Other Costs Should You Budget For?
The deposit is only one part of the overall cost of purchasing a commercial property.
You may also need to budget for:
Arrangement Fees
Some lenders charge an arrangement or facility fee for providing the mortgage.
Valuation Fees
The lender may require a commercial property valuation.
Legal Fees
You may need to pay solicitors to handle the purchase and mortgage documentation.
Surveys
Depending on the property, you may need a building survey or other specialist assessment.
Stamp Duty Land Tax
In England and Northern Ireland, Stamp Duty Land Tax may apply to commercial property purchases above the relevant thresholds.
Different tax rules apply in Scotland and Wales, so the location of the property matters.
Other Purchase Costs
You may also need to account for insurance, property maintenance, business relocation and other transaction related expenses.
It is important to calculate the total cash required before committing to a purchase.
Commercial Mortgage vs Residential Mortgage: How Is Borrowing Different?
Commercial mortgages are assessed differently from standard residential mortgages.
A residential mortgage is generally based on an individual’s personal income, expenditure and credit profile.
A commercial mortgage may involve a business, a commercial investment property or a company purchasing premises.
The lender may therefore assess:
| Factor | Residential Mortgage | Commercial Mortgage |
| Main affordability focus | Personal income and expenditure | Business finances or property income |
| Property type | Residential home | Commercial or eligible mixed use property |
| Deposit | Depends on residential lending criteria | Often around 25% to 40%, depending on the case |
| Rental income | Relevant for buy to let | Often central to investment property lending |
| Borrower | Individual or eligible joint applicants | Individuals, companies or investment structures |
| Assessment | Residential mortgage criteria | Commercial property and business lending criteria |
| Commercial mortgage terms and eligibility vary by lender, so the right structure depends on the property and the borrower’s circumstances. |
How Long Does It Take to Arrange a Commercial Mortgage?
The timescale depends on the lender, property, borrower and complexity of the transaction.
A straightforward application may progress more quickly than a case involving a complex company structure, unusual property or complicated legal work.
The process may include:
- Initial borrowing assessment
- Document preparation
- Application submission
- Property valuation
- Lender underwriting
- Mortgage offer
- Legal work
- Completion
If you are planning a property purchase, it is sensible to allow sufficient time for each stage.
You can also read our guide on How Long Does a Commercial Mortgage Take to Complete?.
Frequently Asked Questions
How much can I borrow with a commercial mortgage in the UK?
Many commercial mortgage lenders offer around 60% to 75% of a property’s value, although some eligible borrowers may access higher LTV products. The actual amount depends on affordability, property value and lender criteria Knox Mortgages.
Can I borrow 75% of a commercial property’s value?
Potentially. Some lenders offer commercial mortgages at up to 75% LTV, subject to the property, borrower and affordability requirements.
Can I borrow 80% of a commercial property’s value?
Some lenders offer up to 80% LTV for eligible commercial mortgage applications, particularly certain owner occupied properties. Availability depends on lender criteria.
How much deposit do I need for a £500,000 commercial property?
At 70% LTV, a £500,000 property would require a £150,000 deposit. At 75% LTV, the deposit would be £125,000. Additional fees and purchase costs would apply.
Can a limited company get a commercial mortgage?
Yes. A limited company can potentially obtain a commercial mortgage to purchase or refinance a commercial property, subject to lender assessment.
Can I get a commercial mortgage if my business is new?
Potentially. Some lenders may consider newer businesses, but the available options depend on the business plan, deposit, directors’ experience and financial circumstances.
Does rental income affect how much I can borrow?
Yes. For commercial investment properties, lenders often assess whether the rental income can support the proposed mortgage interest and other borrowing requirements.
Can I borrow more if my commercial property increases in value?
Potentially. An increase in property value may improve the LTV position and could support additional borrowing, subject to affordability and lender criteria.
Can I use a commercial mortgage to buy my own business premises?
Yes. Commercial mortgages can potentially be used to purchase premises that a business occupies for its own operations.
What is the minimum deposit for a commercial mortgage?
There is no universal minimum deposit. The required contribution depends on the lender’s maximum LTV, the property and the borrower’s circumstances.
Final Thoughts
How much can you borrow with a commercial mortgage? The answer depends on more than the property’s purchase price.
Loan to value, deposit size, business affordability, rental income, property type and lender criteria all influence the amount you may be able to secure.
Many commercial mortgage borrowers should plan around a substantial deposit, often in the region of 25% to 40%, while eligible cases may qualify for higher LTV lending.
Before applying, establish the property’s likely value, calculate your available deposit, review your business finances and consider the total cost of borrowing.
If you are looking to purchase commercial premises, refinance an existing property or explore funding for a commercial investment, The Commercial Mortgage Guy can help you understand the available finance options.
Visit The Commercial Mortgage Guy to explore commercial mortgage solutions and discuss your requirements.
You may also find our guides on Can You Get a Commercial Mortgage to Buy a Property Through a Company? and When Should You Consider Remortgaging a Commercial Property? useful when planning your next property finance decision.