How much deposit a commercial mortgage actually needs.
The honest range is 25% to 40%, and where you land inside it is decided by three things: what the building is, who is buying it, and which valuation figure the lender applies its percentage to. Most people budget for the first and get surprised by the third.
By Dominic Whitecross, Co-Founder, HyLend. Last reviewed October 2026.
The short answer
A commercial mortgage in the UK typically needs a deposit of 25% to 40% of the purchase price. Lenders express this the other way round, as a maximum loan to value: 75% LTV means a 25% deposit, 60% LTV means 40%.
That range is wide because commercial property is not one asset class. A trading business buying the unit it operates from, a landlord buying a let industrial unit and an operator buying a care home are three different risks, and lenders price and leverage them differently. The table below is the realistic picture across the whole market in September 2026.
Deposit by asset type and borrower
| Situation | Typical maximum LTV | Deposit you should plan for |
|---|---|---|
| Owner occupier, established trading business, standard premises | 70% to 75%, occasionally 80% | 25% to 30% |
| Investment property, good covenant, long unexpired lease | 65% to 75% | 25% to 35% |
| Investment property, short lease or weaker tenant | 55% to 65% | 35% to 45% |
| Semi commercial (shop with flats above) | 70% to 75% | 25% to 30% |
| Care homes, hotels, pubs and other trading assets | 55% to 70% of going concern value | 30% to 45% |
| Land and development sites | 50% to 65% | 35% to 50% |
| Portfolios of mixed commercial assets | 60% to 70% | 30% to 40% |
Indicative whole of market position, September 2026. Individual lenders sit outside these ranges in both directions.
Two patterns are worth noticing. Leverage falls as the asset becomes more specialised, because the pool of buyers in a forced sale shrinks. And leverage falls as the income becomes less certain, which is why a short unexpired lease costs you deposit even on a good building.
The part that catches people out: which value the percentage applies to
A 30% deposit sounds like a fixed number. It is not, because the lender does not apply its loan to value to your purchase price. It applies it to the valuation figure its own policy requires, and on commercial property there are usually several in the same report.
| Value in the report | £ | Loan at 70% | Deposit needed on a £1m purchase |
|---|---|---|---|
| Market value | £1,000,000 | £700,000 | £300,000 |
| 180 day restricted marketing value | £900,000 | £630,000 | £370,000 |
| Vacant possession value | £780,000 | £546,000 | £454,000 |
Same building, same price, same headline 70% LTV, and the deposit ranges from £300,000 to £454,000 depending purely on the basis the lender uses. This is the single most common reason a commercial purchase needs more cash than the borrower budgeted for, and it is knowable before a valuation is instructed. How 90 and 180 day valuations reduce what you can borrow →
Ways to reduce the cash you put in
- Additional security. Equity in another property you own can be charged to the lender alongside the purchase. The deposit is still there, it is simply not cash. This is the most common route to a low cash contribution on commercial deals.
- Vendor deferred consideration. The seller agrees to receive part of the price later. Lenders treat this cautiously and some will not allow it, but where the vendor is motivated it can close a gap.
- Second charge or mezzanine. A second lender behind the senior facility, at a higher rate, on the slice the senior lender will not fund. It adds cost and complexity and needs the senior lender consent. Mezzanine finance →
- Buying below market value. Where a lender will lend against the valuation rather than the price, a genuine discount can fund part of the deposit. Not every lender will, which is a whole of market question. Below market value structures →
- Fixing what depresses the valuation. Regearing a short lease, documenting rent reviews or evidencing the tenant covenant before instruction can lift the figure the lender uses by more than any negotiation afterwards.
What sits on top of the deposit
The deposit is the largest cash item but not the only one. On a purchase, plan for the lender arrangement fee at 1% to 2% of the loan, a valuation fee paid up front and not refundable, legal costs on both sides, stamp duty land tax, and any broker fee. On a £1m purchase with a 30% deposit the realistic cash requirement is closer to £340,000 to £360,000. Model it properly before you commit to a price. Commercial mortgage calculator →
Where a broker changes the answer
Two lenders can quote the same 70% and need deposits £150,000 apart, because they size on different valuation figures and treat additional security differently. Testing that before you pay for a valuation is what we do.
Tell us the asset and the price and we will tell you the realistic deposit →
Commercial mortgage deposit FAQs
How much deposit do you need for a commercial mortgage?
Typically 25% to 40% of the purchase price. Owner occupied premises for an established trading business sit at the lower end, with some lenders going to 75% or occasionally 80% loan to value. Investment property let to tenants usually needs 30% to 35%. Specialist assets such as care homes, hotels and land need the most, often 40% or more, because lenders lend at lower leverage against them. The precise figure is set by the valuation the lender uses, not by the price you agreed.
Can I get a commercial mortgage with a 10% deposit?
Rarely as a straight cash deposit, but the same result is often achievable by other routes. A lender can take additional security over another property you own, so the equity in that asset does the work a cash deposit would otherwise do. Deferred consideration from a vendor, a second charge, or a mezzanine slice can also close the gap. Each of these has a cost and narrows the lender pool, so the question is whether the deal supports it.
Does the deposit have to be cash?
No. It has to be equity, which is not the same thing. Cash is the simplest form, but equity in another property offered as additional security, a directors loan, retained profits in the company, or in some cases the discount on a below market value purchase can all count. What a lender will not accept is borrowed money presented as a deposit without disclosure, because it changes the risk of the whole transaction.
Why does the lender want a bigger deposit than I expected?
Almost always because the lender is applying its loan to value to a lower figure than the purchase price. Commercial valuations often carry a market value, a 180 day value and a vacant possession value, and a lender sizing on the lower figure needs you to fund the difference. A shorter unexpired lease, a weaker tenant covenant or a specialist building all push the valuation down and the deposit up.
Is the deposit different for owner occupiers and investors?
Yes, and materially. A trading business buying its own premises is assessed on the strength of the business as well as the property, and lenders are generally more generous with leverage because the borrower has an operational reason to keep paying. An investor is assessed on the rental income and the tenant, and lenders cap leverage more tightly. Expect a 25% deposit to be achievable for a strong owner occupier and 30% to 35% to be the norm for investment property.
What else do I need to pay on top of the deposit?
Budget for the lender arrangement fee, usually 1% to 2% of the loan, the valuation fee, which is paid up front and is not refunded if the deal does not proceed, both sides legal costs, stamp duty land tax on a purchase, and any broker fee. On a £1m purchase with a 30% deposit the cash requirement is realistically £340,000 to £360,000 once those are included, not £300,000.