Loan to value refers to the amount you can borrow, compared to the value of the property - and enquiries about maximum LTV rates on commercial mortgages are common!
The Revolution team is often asked to explain which lenders have higher caps. Other businesses are looking for a 100% business mortgage, and want to know where to apply.
As a commercial mortgage expert, the Revolution Brokers team works with a vast range of lenders and specialists, and are always on hand to give professional advice.
Here we have answered some of the most frequently asked questions - but if you need more advice, give us a call on 0330 304 3040 or drop an email to firstname.lastname@example.org.
Is it Possible to Get a 100% LTV Commercial Mortgage?
Typically, a mainstream lender will offer around 70-80% as a maximum LTV cap on an owner-occupied mortgage. They will often go up to 75% for commercial investments, so you'd need a deposit of anywhere from 20% up to 40% depending on the circumstances.
However, there are niche lenders who will offer 100% commercial mortgages.
In most cases, this requires some security or first charge debenture to offset the higher risk.
How Can I Apply for a 100% Loan to Value Business Mortgage?
If your mortgage is 100% LTV, that means it is worth the total amount of the property, and you won't need a deposit.
In almost every case, you'll need to offer security instead of a deposit, which means that the lender has something to rely on if you fail to keep up with the repayments.
Most security assets are property, or a business asset owned by the company with enough equity to make it equivalent to a reasonable deposit. However, you need to consider this carefully as there is the potential that the asset will be repossessed if you default on the payments.
Am I Eligible for a 100% Commercial Mortgage?
Every lender will have policies to adhere to, but in essence, the key criteria are the same as for any other type of commercial lending:
- Whether the business is profitable and earns enough to afford the repayments?
- Does the company have a good credit rating? Note that businesses with bad credit, or owned by shareholders with adverse credit are best placed to apply to specialist bad credit lenders.
- How well established is the business, and does it have a good track record of healthy trading?
- Is the investment viable, and supported by a well thought out business plan?
I Want to Apply for a 100% Business Mortgage - Where Do I Start?
If you need a high LTV commercial loan, the best option is to consult an experienced, independent broker. As a whole-of-market service, the Revolution Finance team can recommend any product from any lender that we think is the best deal for you.
Brokers can also negotiate with lenders, and ensure you only approach commercial mortgage providers they know will be able to consider your application.
Are 90% LTV Commercial Mortgages Available?
Yes, if you have a 10% deposit and can offer some extra security, you can secure lending from providers.
At 90% Loan to Value, this is still a high-risk proposition, and so you are advised to consult a professional broker to recommend the best lenders to apply to.
Can I Get a Business Loan if I have a 20% Deposit?
If you have a 20% deposit and need an 80% LTV business mortgage, you might not need to offer additional security, provided the application isn't otherwise considered high risk.
Many mainstream lenders have a 75% cap, and therefore will need additional security. However, specialist providers can offer an 80% LTV.
In almost all cases, if you need to borrow anywhere from 85% and above of the value of a commercial property or investment, extra security or guarantees will be required.
Is it Possible to Get a Commercial Mortgage if I Don't Have a Deposit?
Yes, you can get a 100% LTV commercial mortgage, but if you don't have any deposit, then you’ll need to offer an alternative form of security.
Most commercial mortgages are limited to:
- 70-80% for owner-occupied premises
- 75% for commercial mortgages
However, you can sometimes secure 80% and above, provided the security on offer is sufficient.
Expert Support on Commercial Mortgages at 100% LTV
High LTV commercial mortgages are a specialist product and one you are highly unlikely to find on the high street. The most efficient option is to work with an expert broker, who can scour the market on your behalf and make independent recommendations about the best products for you.
Contact the Revolution Brokers team today on 0330 304 3040 for more assistance.