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UK Commercial Property Loan-to-Value (LTV) Calculator
Determine commercial loan leverage, maximum facility advance, and borrower equity requirements under UK bank underwriting standards.
Last updated:
Workflow
How it works
Follow the underwriting path lenders use: input the deal, apply constraints, then read the result.
Step 1
1. Enter market valuation or purchase price
Input RICS Red Book Market Value or contracted commercial purchase price.
UK Commercial LTV Formula
Loan-to-Value (LTV) measures the commercial mortgage facility balance as a proportion of the property's appraised RICS Red Book Market Value.
Read the calculation methodology and limitations.
LTV (%) = (Commercial Facility Balance / Property Market Value) x 100
Borrower Equity = Property Valuation - Facility BalanceExample
A £15,000,000 logistics facility in the Midlands with a £9,000,000 loan facility has an LTV of exactly 60.00%.
⚡ UNDERWRITING BENCHMARKS
See This Calculator in Action
Explore institutional underwriting examples. Load any scenario into the live calculator with one click to customize rates, amortization, and property valuation.
Midlands logistics facility
Prime Logistics Hub
Requested Senior Debt
£9,000,000Proposed loan financing balance
Property Valuation
£15,000,000Appraised value or purchase price
Maximum LTV
65%Maximum loan-to-value ceiling
SIZING OUTCOMEUnderwriting Benchmark
60.00% LTV
Calculated resultUnderwriting Math Formula
LTV (%) = (Commercial Facility Balance / Property Market Value) x 100💡
Institutional Takeaway
Five points of headroom under a 65% cap absorb a modest valuation fall before a covenant bites.
Worked examples
| Scenario | Calculation | Result |
|---|---|---|
| Prime Logistics Hub | £9,000,000 Facility / £15,000,000 Value | 60.00% LTV |
| Regional City Office | £5,500,000 Facility / £10,000,000 Value | 55.00% LTV |
Conversion reference
| Property Sector | Typical Senior Bank LTV | Alternative / Mezzanine LTV |
|---|---|---|
| Prime Logistics / Distribution | 60% – 65% | 70% – 75% |
| Build to Rent (BTR) | 65% – 70% | 75% – 80% |
| Prime City / West End Office | 50% – 55% | 65% – 70% |
| Regional Retail / Leisure | 45% – 55% | 60% – 65% |
Quick facts
- Post-GFC and under PRA guidance, UK clearing banks generally cap senior CRE facilities between 55% and 65% LTV.
- LTV is always evaluated alongside debt yield and Interest Cover Ratio (ICR) to ensure cash flow supports the debt service.
UK Commercial Debt Advisory Team
CRE Underwriting & Prudential Regulation Reviewers
- Prudential Regulation Authority (PRA) Supervisory Statement SS9/17 compliance reviews
- Commercial mortgage debt yield & Interest Cover Ratio (ICR) quantitative structuring
Our technical team reviews commercial property lending models across London, the South East, and UK regional corridors, aligning calculations with Bank of England and RICS valuation standards.
Methodology: formulas are calculated from borrower-entered inputs using standard CRE underwriting relationships for NOI, debt yield, DSCR, LTV, cap rate, loan constant, and maximum loan proceeds.
Reviewer note: pages are reviewed for formula accuracy and updated when lender benchmarks or site methodology changes.
Disclaimer: results are educational estimates only and are not financial, legal, tax, valuation, or lending advice.
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Frequently asked questions
Under PRA supervisory oversight, UK clearing banks rarely exceed 60% to 65% LTV for commercial investment assets, preferring lower leverage supported by strong tenant covenants.