Most commercial mortgage lenders quote a maximum of 65-75% LTV, but that headline figure genuinely isn’t a guarantee – even a property comfortably supporting 75% LTV on paper can see your actual borrowing capped lower once affordability stress-testing is applied. Understanding what genuinely gets you to the top of the range, rather than stuck below it, matters before you commit to a purchase price.
Why Owner-Occupied and Investment LTV Genuinely Differ
Our UK Commercial Finance hub covers the wider lending landscape; this page focuses specifically on what genuinely unlocks the higher end of the LTV range. Our Occupier Mortgages page covers buying to trade from yourself, where 70-80% LTV is genuinely achievable for established businesses; our Investment Mortgages page covers letting to a tenant, where 65-75% is more typical, given the genuine additional void and re-letting risk a lender takes on.
The Genuine Checklist for Reaching the Top of the Range
It’s worth knowing lenders offering 75% LTV, rather than a more conservative 60-65%, are generally looking for at least two years of filed accounts showing consistent profitability, a clean personal and business credit history, a property in a genuinely prime, easily re-lettable location, and – for investment purchases specifically – a strong tenant covenant on a reasonably long lease.
Why the Headline LTV Isn’t the Real Ceiling
This is worth understanding clearly: even where a lender confirms 75% LTV is available in principle, affordability stress-testing can still cap your actual borrowing below that figure. Lenders apply a stressed interest rate, often several percentage points above your actual pay rate, commonly 6.5-8% even where genuine rates sit in the high 3% to low 4% range – meaning the property’s rental income or trading performance needs to comfortably support repayment at this stressed level, not simply at the rate you’ll actually pay. Our piece on the real ICR stress test numbers covers exactly how this calculation works, including a genuine worked example showing how a coverage ratio shortfall can reduce your maximum loan well below what the headline LTV alone would suggest.
Why Product Choice Can Genuinely Increase What You Can Borrow
It’s worth knowing that longer fixed-rate products often carry a lower stress rate than shorter or variable alternatives, which can meaningfully increase your genuine borrowing capacity on the exact same property and income. The property itself doesn’t change – only the product structure does – which is exactly why proper structuring advice matters as much as simply requesting the highest advertised LTV.
A Genuine Worked Example
On a £500,000 owner-occupied purchase at 75% LTV, your deposit would be £125,000, plus stamp duty, legal, and valuation costs on top. It’s worth understanding this deposit figure isn’t simply a box to tick – a larger deposit than the minimum required often widens your realistic pool of willing lenders and can secure a meaningfully better rate, given the genuinely lower risk it represents.
Why Valuation Basis Genuinely Affects Your Achievable LTV
Our piece on commercial valuations explained covers why two similar buildings can be valued wildly differently depending on yield assumptions; it’s worth understanding your 75% LTV is calculated against whatever figure the valuer actually reaches, not your purchase price, meaning a cautious valuation can genuinely reduce your available borrowing even where the price itself seemed fair.
How Additional Security Can Genuinely Stretch Your LTV Further
Where your own deposit doesn’t quite reach the level needed, it’s worth knowing some lenders will consider additional security – a second charge on another property you own, a personal guarantee, or a debenture over business assets – to support a higher effective LTV than your cash deposit alone would achieve. Our piece on personal guarantees explained covers exactly what you’re genuinely signing up for with this specific route, worth reading before assuming it’s a straightforward way to bridge a shortfall.
Why Two Years of Accounts Is Genuinely the Common Threshold
It’s worth knowing most lenders want at least two years of filed accounts showing consistent net profit before offering their most competitive LTV and rate, though some specialist lenders will consider as little as twelve months’ trading in certain sectors – worth discussing your specific trading history with your broker rather than assuming a shorter track record rules out the higher end of the range entirely.
Why a Whole-of-Market Broker Genuinely Matters Here
Given a significant majority of successful commercial mortgage applications now go through an intermediary rather than direct to a lender, and specialist brokers can often access pricing meaningfully below advertised public rates, it’s worth comparing your case across the whole market rather than accepting the first LTV and rate quoted by a single lender.
Getting Matched to a Lender Genuinely Offering the Higher End
Given how much genuinely depends on your specific trading history, the property itself, and your realistic deposit position, it’s worth having a proper conversation before assuming either the maximum or minimum LTV automatically applies to your case. Get in touch with details of your circumstances, and we’ll help you understand what’s genuinely achievable.
Frequently Asked Questions
What’s the typical maximum LTV on a commercial mortgage?
Most lenders work to 65-75%, with owner-occupied purchases generally reaching the higher end and investment purchases capped somewhat lower.
Can I still be capped below 75% even if the property qualifies?
Yes, genuinely – affordability stress-testing at a rate well above your actual pay rate can reduce your real borrowing capacity below the headline LTV figure.
Does choosing a longer fixed rate genuinely help me borrow more?
Often yes – longer fixed products can carry a lower stress rate, which can meaningfully increase your genuine borrowing capacity on the same property.
How many years of accounts do I need for the best LTV?
Commonly at least two years of filed accounts showing consistent profit, though some specialist lenders will consider twelve months in certain sectors.
Can I use security other than cash to reach a higher LTV?
Sometimes – a second charge on another property, a personal guarantee, or a debenture over business assets can support additional borrowing beyond your cash deposit alone.
Get in touch with details of your circumstances, and we’ll help you understand your genuinely achievable LTV.
