Business Funding · 12 min read

Commercial mortgage loan to value, deposits and terms in the UK, 2026

Alex BeardsleyFounder & Director

|Updated September 2026

A rent review lands, or the landlord decides to sell, and the numbers on buying get run properly for the first time. Two questions come before all the others: how much deposit, and how much a lender will put in.

This guide answers both with figures from our own lender panel, 45 lenders carrying 463 live commercial mortgage products, and with what two banks publish on their own pages. Figures were checked on 8 September 2026. Panel composition changes over time, and every span below describes products across the panel rather than an offer to you. The product page, commercial mortgages, covers the process and names every lender.

Typical and maximum loan to value

A typical UK commercial mortgage sits at 70% to 75% loan to value, and the highest any product on our panel reaches is 100%. Across 460 live commercial mortgage products the maximum loan to value runs from 60% to 100%, with a median of 75% (checked September 2026). That median is the number to plan around. Three quarters from the lender, a quarter from you.

The 100% products are few, and the use where they exist is professional practice lending to dental, veterinary, medical, accountancy and legal firms, where a registered professional with recurring fees is treated as the safest borrower in commercial property. Everyone else works inside a lower ceiling that depends on whether the business will occupy the building.

Allica Bank, one of the 45 lenders on the panel, publishes “up to 80% loan to value” for owner-occupied mortgages and 75% for commercial investment on its commercial mortgages page, read 8 September 2026. Barclays publishes no maximum on its page at all, only a minimum loan of £25,001 and fixed rate terms from 1 to 10 years, read the same day. When we checked high street criteria in June 2026 the owner-occupied ceiling there sat at 65% to 70%, which is where the 20% deposit becomes a 30% one.

Loan to value also sets the price. The panel rate span below is measured at 70% because that is the level most cases complete at, and a loan at 60% should price under the median while a loan at 80% should price over it.

The deposit that implies

A 75% loan to value means a 25% deposit, and on a £400,000 unit that is £100,000 before fees. The table runs the same purchase at each loan to value a lender might set.

Fees sit on top of the deposit. Allica publishes an arrangement fee of 1.5% on owner-occupied loans and 2.0% on investment loans, read 8 September 2026, which on a £280,000 loan is £4,200 or £5,600. Add the valuation fee and both sets of legal costs, yours and usually the lender's. A deposit can come from company cash, a documented director's loan, the sale of another asset, or equity in another property offered as extra security; what a lender will not take is money whose origin cannot be shown.

Terms in years

Twenty to twenty-five years is the typical commercial mortgage term, and 30 years is the longest on our panel. Of the 45 lenders with a live commercial mortgage product, 29 carry a longest term of 20 years or more, 24 go to 25 or more and 9 go to 30; the median longest term is 25 years (checked September 2026). At the other end, 12 lenders cap their products at five years or under. Those are short-term commercial loans that the platform files in the same category, not a mortgage you would hold for two decades.

Allica publishes 5 to 30 years on owner-occupied loans. The term and the fixed period are separate things: Barclays publishes fixed rate terms from 1 to 10 years, and at the end of a fix the loan usually reverts to a variable rate for the remainder of the term, with breakage costs if you leave early.

Repayment terms are the other half of the question. Capital and interest over the full term clears the balance, and interest-only leaves all of it to repay from a sale or a refinance. Interest-only tends to be capped at a lower loan to value and often at a fixed period: Allica's product guide dated 27 April 2026 allows five years interest-only at the outset at up to 75% LTV, read 7 September 2026. Investors lean towards interest-only for cash flow; owner-occupiers more often repay.

The monthly cost, worked through

Take a £400,000 unit bought at 70% loan to value: £280,000 borrowed, £120,000 deposit, 25 years capital and interest. The panel's annual rate at 70% LTV runs from 4.6% to 11.4% with a median around 7.3% across 402 products, checked September 2026. At 4.6% the payment is £1,572 a month. At the median it is £2,033. At 11.4% it is £2,826. That is a span across the panel's products, not a rate anyone is offering you.

Interest-only on the same £280,000 is £1,073, £1,703 and £2,660 at the three rates, with the whole £280,000 still owed at the end. Term changes the number more than most people expect: the median-rate loan over 20 years costs £2,222 a month and £253,170 in interest across the term, against £2,033 a month and £329,866 over 25 years.

The rate itself is built in two parts. Bank Rate is 3.75%, unchanged since 18 December 2025 and held again at the decision published on 30 July 2026, with the next due on 17 September 2026 (Bank of England, read 8 September 2026). A lender then quotes either a margin over that or a fixed rate for a set period. Allica's guide of 27 April 2026 shows both columns side by side, with the rate set by whether the loan sits at or under 65% LTV or above it. Every rate in that guide already includes a 0.50% discount that depends on opening an Allica current account and routing half of turnover through it, so a business that keeps its banking elsewhere pays 0.50% more than the printed figure.

To run your own price, loan to value and term, the commercial mortgage calculator uses the same panel span and the same repayment formula as this page.

Owner-occupied versus investment, and what recourse means

An owner-occupied mortgage funds premises your own company trades from and is underwritten on your accounts; an investment mortgage funds property let to someone else and is underwritten on the rent. The ceilings differ by about five points, 80% against 75% on Allica's published figures, and so do the fees, 1.5% against 2.0% at the same bank. On Allica's April 2026 guide the margin on commercial investment above 65% LTV is 3.90% over Bank Rate against 2.65% for owner-occupied commercial in the same band, which is the clearest published example of how much more an investment case is charged.

For an investor with no track record the field is narrower: 21 of the 45 lenders on our panel will consider a borrower with no commercial landlord experience (checked September 2026). The tenant matters as much as the building. A covenant with strong accounts on a ten-year lease supports a bigger loan than a start-up with three years left, because the lender is buying the income stream.

Recourse is the question limited company borrowers most often skip. The lender takes a first legal charge over the property and commonly a debenture over the company. On most limited company loans it also takes personal guarantees from the directors. If the company stops paying and the sale of the building falls short, the guarantors owe the shortfall up to the amount guaranteed. Limited liability protects shareholders from the company's debts in general; it does not cancel a guarantee a director has signed. For property-secured lending we work with UK limited companies and LLPs only.

Mixed-use and part-let buildings

A shop with a flat above, or an office block where your firm takes two floors and lets the third, is priced as a mixed-use or semi-commercial asset, and the working range is 65% to 75% loan to value. Allica's guide of 27 April 2026 lists semi-commercial at the standard 75% investment LTV, with the rate set by band on either side of 65% LTV.80% over Bank Rate at or under 65% and 2.55% above, while investment semi-commercial is 2.35% and 3.20% in the same bands (read 7 September 2026). Those are one bank's published margins and not a market rate.

Which category a building falls into is decided by the majority use, by floor area or by value depending on the lender. If your company occupies more than half, the case is usually run as owner-occupied with the rent from the let part as supporting income. If the let part is the majority, it becomes an investment case with the lower ceiling and the higher fee. One line matters more than the rest: if you or a family member would live in the residential part, the loan can fall inside the FCA's definition of a regulated mortgage contract, and that is outside what we arrange.

Our criteria extract does not tag semi-commercial as a separate use, so we cannot put a lender count against it the way we can for offices or pubs, and we would rather say so than guess.

Property types the panel lends on

Lenders sort a commercial mortgage by what the building is used for before they look at the borrower, and the table shows how many of the 45 lenders on our panel have a live product for each use, checked September 2026. Offices lead at 36; churches trail at 7. The fewer lenders a use has, the less competition on terms, and that shows up as a larger deposit before it shows up as a higher rate.

Location narrows the field too. 32 of the 45 lend in Scotland, 42 in Wales and 11 in Northern Ireland (checked September 2026), so a Belfast unit starts with about a quarter of the panel. Naming a lender here is a fact about what our panel covers; it implies no endorsement, affiliation or approval in either direction, and the composition changes over time.

Small industrial units

A small industrial unit needs a 25% to 30% deposit in 2026, and the ceiling is the same owner-occupied maximum as any other mainstream use: 32 of our 45 panel lenders will lend on industrial units and warehouses (checked September 2026). What catches a small unit is the minimum loan rather than the loan to value. Allica's commercial mortgages start at £150,000 and Barclays' at £25,001, both read 8 September 2026, so a £120,000 unit at 75% LTV is a £90,000 loan that clears the second bank's minimum and not the first's.

The other check is the energy certificate. Since 1 April 2023 the minimum energy efficiency standard has applied to every existing commercial lease in England and Wales, so a unit rated F or G cannot lawfully be let unless an exemption is registered, and a lender valuing on resale or re-let will discount for it. Barclays publishes a 0.3% rate reduction for buildings rated B or above, read 8 September 2026, which is the same rule working in the other direction. The industrial unit finance page covers yards, cranes, mezzanines and the rest of the detail.

Releasing equity from commercial property you already own

A commercial remortgage that raises cash is sized exactly like a purchase: a fresh valuation, the lender's maximum loan to value applied to it, and the existing loan repaid from the proceeds. The panel's maximum sits at a median of 75% and the rate span at 70% LTV is the same 4.6% to 11.4% (checked September 2026), so a building worth £600,000 with £200,000 outstanding could in principle support a new loan of £450,000 at 75% and release around £250,000 before fees. The lender asks what the money is for. Funding another purchase, buying out a partner, repaying a bridge and fitting out the building are all recognisable purposes; an undisclosed one is not. Interest-only at up to 75% keeps the monthly cost down where the lender permits it, at the price of leaving the balance in place.

What lenders ask for

Two years of filed accounts is the common floor, and Allica states two years on its criteria. Alongside them a lender will want six months of business bank statements, current management figures if the last accounts are more than a few months old, evidence of where the deposit sits, and the property particulars: address, tenure, price, any lease and the tenant's accounts on an investment purchase. Directors giving guarantees supply a personal asset and liability statement and pass identity checks. The lender instructs its own valuer, and the report is usually the slowest single step. From application to completion, two to four months is realistic, most of it valuation and legal work rather than credit.

Why applications stall

Nobody publishes an approval rate for UK commercial mortgages, so a page that gives you one is guessing. What can be said is where cases stop. A valuation below the agreed price is the first: at 75% of a £380,000 valuation the loan is £285,000, not the £300,000 you budgeted on a £400,000 price, and the £15,000 gap has to come from you. Sector is the second, and the table above shows it in numbers: a pub has 20 possible lenders where an office has 36.

Thin profit is the third. An owner-occupier is sized on what the business can afford after paying for the building, and a lender that wants the payment covered with headroom from adjusted profit will cut the loan rather than decline it, which lands as a bigger deposit. On an investment purchase the equivalent is a short unexpired lease. A deposit that cannot be evidenced, an EPC below E on a unit to be let, a valuation report that flags structural work, and a director's credit file with a recent default each add weeks or end the case. None of these is fixed by applying to more lenders at once; they are fixed by knowing which of the 45 to approach first.

Two related pages. What a commercial mortgage broker does explains how the panel is approached and who pays, and the commercial mortgages page carries the full lender list and the sector guides. If the deadline is too tight for a mortgage, or the building needs work before a mainstream lender will value it, bridging finance is the stopgap with the mortgage as the exit.

Sources

• Allica Bank, commercial mortgages page (owner-occupied up to 80% LTV, investment 75%, 5 to 30 years, £150,000 to £10m and £15m), read 8 September 2026
• Allica Bank, direct commercial mortgage product guide dated 27 April 2026 (margins over Base Rate and fixed rates by LTV band, the 0.50% current account discount), read 7 September 2026
• Barclays, commercial mortgages page (loans from £25,001, fixed rate terms from 1 to 10 years, 0.3% green asset discount at EPC B or above), read 8 September 2026
• Bank of England, Bank Rate (3.75%, decision published 30 July 2026, next due 17 September 2026), read 8 September 2026
• The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015, the minimum EPC E standard that applied to all existing commercial leases from 1 April 2023
• FCA Handbook, MCOB, the perimeter for regulated mortgage contracts
• CapExpand lender panel: term spans and criteria counts, checked September 2026, available products only

Figures checked 8 September 2026. High street loan to value ceilings of 65% to 70% come from our June 2026 review of Barclays and Lloyds criteria; the professional practice 100% figure from the same review. Panel spans are recomputed on each re-pull.

CapExpand Ltd (FRN 1060885) is an Appointed Representative of White Rose Finance Group Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 630772). We are a credit broker, not a lender. We do not provide financial advice.