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If you’re a trading business looking to purchase your own premises, one of the first questions you’ll ask is: how much deposit will I need for an owner-occupied commercial property mortgage? The answer depends on several factors, including loan-to-value (LTV), property type, and your business’s financial strength.
Typical Loan-to-Value (LTV) Ratios
For the strongest cases and the best property types, lenders may offer up to 80% LTV, meaning you’ll need a 20% deposit. However, the more common maximum LTV is 75%, which requires a 25% deposit.
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Can You Reduce the Deposit Requirement?
In some circumstances, lenders may accept additional security or third-party charges to increase the LTV and reduce the deposit. Using this structure, we’ve even secured 100% mortgages with no cash deposit required for certain clients.
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Affordability Matters
As with all mortgages, the maximum loan, and therefore the deposit, is based on affordability. Lenders will typically request:
- The last 2–3 years of trading accounts
- Current management accounts
From this financial information, they calculate the maximum loan amount, which ultimately determines the deposit required.
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Industry-Specific LTVs
Your industry can significantly influence the LTV offered:
- Healthcare (Dentists, Chemists, etc.): 90% to 100% LTV achievable
- Pubs & Restaurants: 50% to 75% LTV typical
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Key Takeaways for Commercial Property Mortgages
- Standard deposit: 20–25%
- Higher LTV possible with additional security
- Affordability and industry type play a major role
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Expert Advice from Advocate Finance
If you’re considering an owner-occupied commercial property mortgage, understanding these factors early can help you plan effectively.
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