80% LTV Commercial Mortgages
An 80% LTV commercial mortgage means borrowing 80% of the property value with a 20% deposit. Most commercial mortgage lenders sit at 65 to 75% LTV as standard, so reaching 80% depends on property use, borrower type and lender selection. For owner-occupier commercial properties and professional practices, 80% LTV is achievable. For some NHS-contracted practices, specialist lenders go further still.
FD Commercial arranges commercial mortgages from £250,000 across England, Scotland and Wales. We have full access to market including lenders whose maximum LTV exceeds what high street banks will consider. No broker fee in most cases.
How commercial mortgage LTV works
Loan-to-value is the ratio of the mortgage amount to the assessed value of the property. An 80% LTV commercial mortgage on a property valued at £500,000 means a loan of £400,000 and a deposit of £100,000. The lender takes a first charge over the property as security. If the borrower defaults, the lender sells the property to recover the debt.
Commercial property values are less liquid than residential. A commercial building with a specialist tenant or use can be difficult to sell quickly at full market value, and lenders price this risk into their LTV limits. This is why commercial mortgage LTVs are lower than residential as a starting point, and why LTV varies considerably by property type.
The deposit is not the only cost at entry. Arrangement fees, survey and valuation costs, legal fees and, in some cases, broker fees all add to the upfront capital requirement. These typically add 1.5 to 3% of the loan value to the initial cost of a commercial purchase and should be factored into your cash position before applying.
LTV ranges by property type
The maximum LTV available is primarily driven by property type and how the property will be used. Investment commercial property, where the borrower lets to a third-party tenant, carries more risk in the lender's view than owner-occupied premises, where the borrower's own business depends on the asset. Professional practices in regulated sectors attract the highest LTVs because income is government-backed or professionally licensed and therefore more predictable.
| Property / use type | Typical LTV | Max LTV | Deposit required at max LTV |
|---|---|---|---|
| Standard commercial investment | 60–65% | Up to 70% | 30% |
| Owner-occupier commercial | 70–75% | Up to 80% | 20% |
| Industrial and warehouse | 65–70% | Up to 75% | 25% |
| Semi-commercial (mixed-use) | 70–75% | Up to 80% | 20% |
| Professional practice (dental, legal, vet) | 75–80% | Up to 80%, or 100% for qualifying NHS practices | 20%, or nil for qualifying practices |
| GP surgery (NHS contracted) | 70–80% | Up to 100% via jigsaw finance | Nil for qualifying NHS practices |
| Student accommodation (PBSA) | 60–65% | Up to 70% | 30% |
| Large commercial (£1m+) | 60–70% | Up to 80% for prime stock | 20% at max LTV |
These ranges reflect general market conditions at the time of writing. Individual lender criteria, property condition, tenant quality and borrower profile all affect the actual maximum LTV available on any given case.
What makes lenders go to 80%
Moving from 70 to 80% LTV is not automatic. Lenders accepting higher gearing need stronger justification across several factors simultaneously.
Owner-occupied use
When you operate your business from the property, you have a direct financial incentive to maintain income and service the debt. Lenders view owner-occupied commercial premises as lower risk than investment properties let to third parties, where covenant quality and void periods introduce uncertainty. Owner-occupation is the single most consistent factor enabling 80% LTV where the same property as an investment would attract 65 to 70%.
Trading history and income strength
Lenders require three years of filed accounts as standard, and those accounts need to show stable, recurring income sufficient to service the debt with headroom. DSCR of at least 1.25x to 1.35x is the minimum threshold, meaning annual income must exceed annual repayments by 25 to 35%. Strong DSCR well above this threshold supports maximum LTV. Weak or inconsistent income restricts LTV regardless of deposit size.
Regulated profession or government-backed income
Solicitors, accountants, architects, medical practitioners and veterinary professionals occupy a different risk bracket in the commercial mortgage market. Professional regulation reduces the probability of practice failure. NHS contracts, GDS/PDS dental agreements and NHS dispensing contracts introduce government-backed income that lenders model differently from ordinary trading income. Specialist lenders serving these sectors regularly reach 80% and, for some practice types, higher.
Personal guarantee
A personal guarantee from the principal or directors is standard at higher LTVs. It gives the lender recourse beyond the property if the business fails and the security is insufficient to cover the loan. Some lenders require a debenture over company assets in addition to the personal guarantee at maximum LTV.
Property quality and marketability
A well-located commercial property with broad alternative use potential is easier to sell in a recovery scenario than a highly specialised premises. Lenders favour properties that would attract multiple buyers if repossessed: standard office buildings, well-positioned retail units and industrial units with good road access. Specialist or single-purpose properties attract lower maximum LTVs because the exit route is narrower.
Professional practices: 80% and above
For owner-occupiers in regulated professions, specialist healthcare and professional practice lenders regularly offer 80% LTV as a standard position rather than an exception. For qualifying NHS-contracted GP surgeries, the ceiling is higher still.
The driver is income predictability. NHS notional rent, NHS UDA contracts and professional practice income streams are treated by specialist lenders as carrying materially lower serviceability risk than general commercial trading income. This translates directly into higher LTV availability and lower deposit requirements.
For dental practices with majority NHS income, 90 to 100% LTV is achievable on freehold premises. For GP surgeries using jigsaw finance (commercial mortgage plus goodwill loan), the full acquisition cost can be funded without a cash deposit. For legal, veterinary and accountancy practices, 80% LTV is typically available from specialist lenders even where the high street would offer 70% or less.
See the individual practice pages for detail on how each sector is assessed:
When the deposit is the constraint
If you have a strong case for a commercial mortgage but the deposit is the limiting factor, there are several approaches worth considering before concluding the deal is not possible.
Additional security
A charge over other property you own, whether residential or commercial, can supplement the security position and support a higher effective LTV on the primary property. This is called cross-charging. The lender assesses the combined security value and the borrower's total exposure. It increases your overall debt position but avoids the need for a cash deposit.
Deposit bridging
A bridging loan secured against property you already own can fund the deposit needed for the commercial purchase. The bridge is short-term, typically six to twelve months, and is repaid once the commercial mortgage completes or the bridge security property is sold. Deposit bridging adds to overall borrowing costs and is only suitable where the commercial acquisition is time-sensitive and the exit route is clear.
Vendor finance
In some commercial transactions, the vendor agrees to defer part of the purchase price or take a second charge over the property. This is most common in practice acquisitions where the retiring principal has an interest in the successful ongoing operation. It requires careful legal structuring and most commercial mortgage lenders will need to approve the vendor finance arrangement.
Scenario. A management consultancy wanted to buy the office building they had been leasing for seven years. Property valued at £620,000. They had a 20% deposit available (£124,000) but their existing bank would only offer 70% LTV, requiring an additional £62,000 deposit they did not have.
What we did. We approached specialist commercial lenders with appetite for owner-occupier office lending. The practice had three years of strong accounts, stable income, and a clean credit history. DSCR at 80% LTV was comfortable at 1.38x. We secured 80% LTV at a lower rate than the bank had offered, on a 20-year term with interest-only available for the first two years.
Loan arranged: £496,000 at 80% LTV. The client proceeded with their existing deposit and no additional capital required.
Rate and cost implications of higher LTV
Commercial mortgage rates are not published in the way residential rates are. They are priced individually at application based on property type, LTV, DSCR, term length, repayment method and prevailing market conditions. As a general rule, a 80% LTV loan carries a higher margin than a 65% LTV loan on the same property by roughly 0.25 to 0.75 percentage points, reflecting the additional risk the lender is taking on.
As an indicative benchmark, commercial mortgage rates at the time of writing sit at approximately base rate plus 1.5 to 2.5%, with the higher end applying to higher-LTV and less conventional property types. Fixed rates are available and priced relative to swap rates at the time of application. These figures are indicative only; actual rates depend on the full case presented to lenders.
Arrangement fees on commercial mortgages are typically 1 to 1.5% of the loan value and are charged by the lender on offer. These are separate from any broker fee, which in most cases FD Commercial does not charge, as we are paid by the lender on completion.
Frequently asked questions
How much deposit do I need for a commercial mortgage?
Most commercial mortgages require 25 to 35% deposit, reflecting 65 to 75% LTV. Owner-occupier commercial mortgages can reach 80% LTV, requiring a 20% deposit. Professional practices in regulated sectors can access 80% and sometimes more. NHS-contracted GP surgeries can access 100% of the purchase cost through jigsaw finance, with no cash deposit required.
Can I get a commercial mortgage at 80% LTV?
Yes, for owner-occupier commercial property and professional practices. Standard commercial investment mortgages typically max at 65 to 70% LTV. Getting to 80% generally requires owner-occupied use, three or more years of strong accounts, a DSCR comfortably above 1.25x and a personal guarantee. Lender selection is critical: not all commercial lenders go to 80%.
Can I get a commercial mortgage with no deposit?
For standard commercial property, 100% LTV is not generally available without additional security from another property. For qualifying NHS-contracted GP surgeries, jigsaw finance can fund the full purchase cost. Some professional practices also access 100% LTV through specialist lenders. If deposit is the constraint, additional security, deposit bridging or vendor finance are the main options to consider.
What is DSCR and why does it affect LTV?
DSCR (Debt Service Coverage Ratio) measures whether income from the property or business covers annual mortgage repayments. Most lenders require DSCR of at least 1.25x to 1.35x. Strong DSCR supports maximum LTV; weak DSCR limits it. For a property generating £65,000 income per year, the maximum annual repayments a lender accepting 1.25x DSCR would allow is £52,000, which sets the maximum loan size at that rate and term.
Does a bigger deposit always mean a lower rate?
Generally yes. Higher LTV is priced as higher risk, typically adding 0.25 to 0.75 percentage points to the margin compared to a lower-LTV application on the same property. The saving from a lower rate must be weighed against the opportunity cost of committing more capital to the deposit. In many cases, particularly for growing businesses, the capital deployed in a lower deposit generates better returns elsewhere than the marginal rate saving would justify.
Can equity in another property substitute for a deposit?
Yes, through additional security or cross-charging. A lender can take a charge over other property you own, improving their security position and enabling higher LTV on the primary asset. The combined loan-to-value across all security is what the lender assesses. This approach increases your total debt exposure but removes the need for a cash deposit.
How long does a commercial mortgage take to arrange?
Typically six to ten weeks from formal application to completion for a standard owner-occupier case with clean documentation. Complex structures, multi-party ownership, specialist property types and PropCo arrangements add time. Well-prepared cases with three years of accounts, a clear DSCR position and standard security complete at the faster end of that range.
Does FD Commercial charge a broker fee?
In most cases, no. We are paid by the lender on completion. Where a borrower fee applies on unusually complex cases, it is agreed and disclosed in full before any work begins. There are no hidden charges.
All rates and figures shown are indicative only and subject to lender assessment, credit profile, and market conditions. Rates may change without notice. Your property may be repossessed if you do not keep up repayments on a mortgage or other loan secured against it.
FD Commercial arranges commercial mortgages from £250,000 across England, Scotland and Wales. Full access to market, including lenders who go to 80% where others stop. No broker fee in most cases.
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