How much deposit do you need for a commercial mortgage?

A commercial mortgage deposit is the share of the property's price you fund yourself, with the lender advancing the rest as the loan. It is expressed as the inverse of the loan to value: a seventy-five percent loan means a twenty-five percent deposit. The deposit is the first hurdle most buyers think about, and it is also the lever that shapes the rate, the choice of lender and whether a deal happens at all. We arrange commercial mortgages across the UK, and as an introducer rather than a lender we match each case to the lenders most comfortable with the deposit on offer.

This guide explains how much deposit you need for a commercial mortgage in 2026, why the figure varies by property type and borrower, how the deposit affects the interest rate and the overall cost, and where the money to fund a deposit can come from. We also cover what happens when you have only a small deposit, whether a no-deposit commercial mortgage is realistic, and the questions buyers ask most often. The aim is to give you a clear sense of the equity required before you commit, because the deposit drives almost every other term on the loan.

How much deposit do you need for a commercial mortgage?

A commercial mortgage deposit is the cash a buyer contributes towards the purchase, with the lender advancing the balance as the loan. As a rule of thumb you need a deposit of around twenty-five to forty percent of the property's value, which corresponds to a loan to value of sixty to seventy-five percent. Most owner-occupier deals, where your own business will trade from the building, sit at the lower-deposit end because the lender takes comfort from the trading income. Investment deals, where you let the property to a tenant, often need a slightly larger deposit because the loan rests on rental income that could be interrupted if a tenant leaves.

The exact deposit turns on the property type and the strength of the case. A standard, easily resold asset such as a modern industrial unit or warehouse supports a higher loan to value, so a smaller deposit, than an unusual or specialist building that a lender would struggle to sell on. The borrower's accounts, credit history and experience all feed in too, because a lender setting the deposit is really judging how much cushion it needs against the risk that the loan goes wrong. A first-time buyer or a business with a short trading record will often be asked for a larger deposit than an established borrower with a strong record, even on the same property.

There is no fixed minimum deposit set in law, and the figure is a commercial judgement by each lender rather than a regulated threshold. That is precisely why the deposit a borrower is asked for can differ from one lender to the next on the very same property. We test the deal across a panel so a buyer is not anchored to the first, often cautious, deposit a single bank quotes.

It is worth being clear about how the deposit relates to the loan to value, because the two are simply two sides of the same figure. If a lender will advance seventy percent loan to value, the deposit is the remaining thirty percent of the property's value. A buyer purchasing a 500,000 pound warehouse at seventy percent loan to value would borrow 350,000 pounds and put in 150,000 pounds of their own money. Working back from the loan to value a lender offers is the quickest way to know the cash a purchase will demand, and it is the calculation we run first on any deal.

What is the minimum deposit for a commercial property?

The practical minimum deposit for a commercial property is usually around twenty-five percent, meaning a maximum loan to value of about seventy-five percent, and this applies most often to strong owner-occupier deals on mainstream assets. Some lenders will stretch a little further for an exceptional case, and a handful of specialist products reach higher, but the borrower should treat twenty-five percent as the realistic floor for planning purposes rather than assume the keenest possible figure.

For investment commercial mortgages the minimum deposit is typically higher, often around thirty percent or more, because repayment depends on a tenant continuing to pay rent rather than on a business the borrower controls. The lender also applies an interest cover test, checking that the rental income comfortably exceeds the mortgage interest, and a thin margin there can force a larger deposit even where the headline loan to value would allow less.

It is worth seeing how the interest cover test interacts with the deposit, because the two work together to set the loan. The lender takes the rent, applies a stress rate above the actual interest rate to allow for future rises, and checks the rent still covers the stressed interest by a required margin. Where the rent is strong, the loan to value is the binding limit and the deposit is simply the balance above it. Where the rent is thinner, the cover test caps the loan below the maximum loan to value, which means the borrower needs a larger deposit to complete even though the property would in principle support more borrowing. We run both tests before approaching the market so the real deposit is clear from the start.

The deposit is not the only cash a buyer needs at the outset. Stamp duty land tax on commercial property, legal fees, a valuation fee and the lender's arrangement fee all sit on top of the deposit, and together they can add several percent to the cash required to complete. We set out the full cash picture early, so a buyer who has saved the deposit is not caught short by the costs that surround it.

Buyers sometimes assume the minimum deposit is a single national figure, but in practice it shifts with the property and the market. London and the South East can attract slightly different treatment from lenders than other regions, not because of a higher fixed deposit, but because of how lenders read demand, liquidity and resale prospects in different locations. The kind of asset matters more than the postcode, though: a mainstream warehouse or industrial unit anywhere with good road access tends to support a higher loan to value than a niche building, so the deposit follows the asset's lettability and resale appeal as much as where it sits. This is why two buyers can be quoted different deposits for similar-looking properties, and why testing the deal across several lenders is the only reliable way to find the keenest figure.

How does your deposit affect the rate and overall cost?

The size of the deposit is the strongest single lever on the interest rate. A larger deposit means a lower loan to value, which means less risk for the lender, which means a sharper rate for the borrower. Pushing the deposit from twenty-five percent up to thirty-five or forty percent can move a borrower into a lower pricing tier, and over a long term that reduction in the rate often saves far more than the extra equity costs to find.

A bigger deposit also widens the choice of lender. Many of the keenest products are reserved for lower loan to value lending, so a borrower with a generous deposit can access banks and rates that are simply closed to someone borrowing at the top of the range. More competition for the case tends to drive the rate down further, which is why the deposit and the rate should be planned together rather than treated as separate decisions.

There is a practical pattern in how lenders tier their pricing by loan to value. A deal at sixty percent loan to value often sits in a lender's best pricing band, with the rate stepping up as the loan to value rises through sixty-five, seventy and seventy-five percent. Crossing a threshold can move a borrower into a cheaper band, so finding a relatively small additional sum to drop from, say, seventy-six to seventy-five percent can unlock a meaningfully lower rate. We identify where these thresholds fall for the lenders most likely to take the case, so a borrower close to a band can decide whether the extra deposit is worth the saving it buys.

There is a balance to strike, because money tied up in a deposit is money the business cannot use elsewhere. A buyer who drains every reserve to maximise the deposit may secure a fine rate but leave the business short of working capital. We model several deposit levels against the rate and the fees so the borrower can see the trade-off in pounds and choose the point that suits both the loan and the wider business.

The right balance also depends on the borrower's plans for the property and the business. A buyer who intends to hold a warehouse for the long term and values the lowest possible monthly cost may favour a larger deposit and a lower rate, while one who expects to grow quickly and needs cash to fund that growth may prefer to keep more in reserve and accept a slightly higher rate. Neither is wrong; the point is to choose deliberately rather than default to the largest or smallest deposit. We talk through how the deposit decision sits within the wider business plan so the loan supports the strategy rather than constraining it.

Where can the money for your deposit come from?

The most common source of a deposit is the buyer's own cash savings or retained profit held in the business, and lenders are most comfortable when the deposit is clearly the borrower's own money. Where a buyer already owns property, equity released by a remortgage or a second charge on another asset can fund the deposit, and proceeds from selling an existing property are a frequent source for someone trading up or relocating. Some buyers fund the deposit from a maturing investment, the sale of plant or other business assets, or a capital injection from a new shareholder, and each of these is acceptable provided the source can be evidenced clearly.

Some buyers raise part of the deposit through other routes, such as a director's loan into the company, investment from a business partner, or in some cases a short-term bridging loan against another asset that is later repaid. A lender will scrutinise the origin of the deposit closely under anti-money-laundering rules, so the funds need a clear and documented trail. Borrowed deposit money can also affect affordability, because the borrowing behind it still has to be serviced, and the lender will factor that in.

A pension can also play a part for owner-occupiers. A self-invested personal pension or a small self-administered scheme can buy commercial property the business then occupies, which changes how the deposit and the purchase are structured. Because the source of the deposit affects which lenders will lend and on what terms, we discuss it at the outset and present the funding in a way the lender can accept without hesitation.

Whatever the source, the lender will expect the deposit to be evidenced clearly. Recent bank statements, sale completion statements, a remortgage offer on another property or pension documentation will all be requested depending on where the money comes from, and gaps in that trail slow the application down. A deposit that has moved through several accounts, or arrived recently from an unexplained source, invites questions under anti-money-laundering checks. We help a borrower assemble the evidence early so the origin of every pound is documented and the deposit does not become the thing that stalls an otherwise sound case.

Can you get a commercial mortgage with a small or no deposit?

A one hundred percent commercial mortgage, with no deposit at all, is very rare and not something a buyer should plan around. Lenders want the borrower to have real equity at stake, because that shared exposure aligns the two sides and provides a cushion if values fall. The usual route to a smaller cash deposit is not zero, but additional security: a borrower with another property can offer it alongside the purchase so the lender's risk is covered without a large cash sum changing hands.

Where a buyer has a low deposit, additional or cross-charged security is the most realistic answer. By taking a charge over a second asset, the lender effectively lowers its loan to value across the combined security even though the cash put in is modest. This works only where the borrower genuinely owns suitable extra property, and it does add that property to the lender's reach, so it is a decision to weigh carefully rather than rush. A borrower offering a second property as security is putting that asset at risk if the loan fails, so the saving on the cash deposit has to be weighed against the wider exposure it creates.

For a start-up or a buyer without spare equity, the honest position is that a meaningful deposit will usually be needed, and a deal with thin cash and no extra security is hard to place. Rather than chase a no-deposit product that does not really exist, we look at the whole picture, including additional security, the deposit source and the strength of the trading or rental income, and present the most fundable version of the case to the lenders most likely to back it.

A start-up does have routes worth exploring even where the deposit is tight. A government-backed guarantee scheme can sometimes reduce the cash a new business needs to commit, and a strong personal guarantee from a director with assets behind them can give a lender enough comfort to proceed. None of these removes the need for equity entirely, but they can soften the requirement, and the right combination depends on the borrower's wider position. We weigh these options for a new business rather than treat a thin deposit as the end of the conversation, because a case that looks marginal at one lender can be perfectly fundable at another with the right structure behind it.

How does a low deposit affect your interest rate and approval?

A low deposit raises the loan to value, and a higher loan to value almost always means a higher interest rate, because the lender is carrying more risk against a smaller cushion. A borrower stretching to seventy-five percent loan to value will be quoted a dearer rate than one putting in forty percent, and the difference compounds over a long term into a sizeable sum. The deposit is therefore not just a hurdle to clear at the start but a decision that shapes the cost of the loan for its entire life.

A low deposit can also narrow the field of lenders willing to proceed at all. Many of the keenest commercial mortgage products are reserved for lower loan to value lending, so a thin deposit closes off the sharpest options and leaves the borrower with a smaller, often more expensive, pool of lenders. It can also trigger a closer look at the rest of the case, because a lender with less equity behind it scrutinises the income, the property and the borrower more carefully to be sure the loan is sound.

There are ways to improve the position without finding more cash immediately. Strengthening the trading accounts, securing a longer lease from a tenant, or improving a credit profile can all help a borrower qualify for better terms over time, and where the deposit is genuinely tight in the short term, additional security may bridge the gap. We map these levers for each borrower, because lifting the case out of the highest loan to value band is often the most effective way to cut the rate and widen the lenders willing to lend.

It is also worth remembering that the deposit interacts with affordability. Even where a lender will accept a high loan to value on paper, the larger loan means a larger repayment, and the income behind it has to cover that repayment with the margin the lender requires. A buyer who minimises the deposit can find that the affordability test, not the loan to value, becomes the binding constraint, capping how much can be borrowed. We model the deposit, the loan to value and the affordability together so the three line up rather than pull against each other.