Commercial Property Loan Deposit and LVR in Australia (2026): How Much You Need, and Why the Asset Decides It
The same borrower with the same deposit can be approved on a warehouse and declined on a childcare centre. Nothing about the borrower changed; the asset moved down the lender’s ladder, and the deposit moved with it. That is the whole logic of commercial deposits, and this page walks it: what LVR really measures, the ladder, the number to plan on, the costs on top, where the money can come from, and why the deposit and the rate are one decision.
The deposit on a commercial property loan is not a single number. It is whatever sits above the lender’s loan to value ratio ceiling for that asset, and the ceiling moves with what you are buying: a standard office, warehouse or shop sits at the top of the ladder, specialised assets such as pubs, childcare centres, petrol stations and medical rooms sit lower, and structures such as SMSF or lease doc lending lower again. At most lenders the ceiling for standard commercial property sits at or below 80 per cent of value, so a 20 per cent deposit plus purchase costs is the starting point, and the deposit can come from cash, from equity in residential property, or from a super fund’s own capital.
How much deposit does your commercial property need? A former banker works it out on your asset, free.
The answer turns on the type of property and who will occupy it. Give us both, with the price, and we show the deposit different lenders will ask for.
Map my deposit with a former banker- Deposit is set by LVR, and LVR is set by the asset. Standard commercial property carries the highest ceilings; specialised and single purpose assets carry lower ones, because the lender is pricing how easily it could sell the building if it had to.
- Plan on 20 per cent plus costs for a standard asset. Ceilings above that exist on strong files, and materially lower ceilings apply to specialised assets, short leases and thin financials.
- Purchase costs run higher than residential. Stamp duty on commercial property, legal and due diligence costs, and GST considerations on some purchases all sit on top of the deposit.
- The deposit does not have to be cash. Equity in a home or investment property can stand in for part of it, and a business’s own premises can be bought inside a self managed super fund with the fund’s capital.
- Lower LVR buys a lower rate. Every step down in LVR moves the pricing, which is why the deposit decision and the rate decision are the same decision.
Documentation moves the loan-to-value ratio as much as the asset does. A low doc commercial loan, evidenced by BAS, bank statements or an accountant’s letter instead of tax returns, is capped at 65 to 80 per cent by the lenders that publish terms, which means a 20 to 35 per cent deposit; the caps and the lenders are compared in our low doc and no doc commercial loans guide.
What LVR really measures, and why the valuation sets your deposit
Loan to value ratio is the loan as a percentage of the lender’s valuation of the property, not the price you agree to pay. The two can differ, and on commercial property they differ more often than on houses, because a commercial valuation looks at rental income, lease length, tenant strength and the asset’s resale market as much as at comparable sales. A valuation that comes in under the contract price raises the deposit you need, since the lender lends against its number, not yours. That is the first reason to get the valuation ordered early, and the first reason the deposit conversation cannot be separated from the property conversation.
Working out the deposit for a commercial purchase? WhatsApp, text or call Ahmed about the property type and what a lender is likely to want. His own mobile, no call centre, and no obligation.
The asset ladder: why deposits differ by property type
Lenders sort commercial property by how easily they could sell it if the loan went wrong, and that sort sets the LVR ceiling.
- Top of the ladder: standard assets. Offices, warehouses, industrial units, retail shops and strata suites in established locations with broad demand.
- Middle: assets with a narrower buyer pool. Larger single tenant buildings, regional commercial property, and mixed use where the commercial component dominates.
- Lower: specialised and single purpose assets, whose value is tied to the business operating in them: pubs and hotels, childcare centres, petrol stations, medical and dental rooms, aged care, service stations, function centres.
- Lower again: limited recourse or unverified income structures, such as SMSF borrowing and lease doc or low doc lending.
The same borrower with the same deposit can be approved on a warehouse and declined on a childcare centre, purely on where each asset sits on the ladder.
What the credit assessor actually looks at first. The exit, before the borrower. The first question on a commercial file is how the bank would sell this building if it had to, and to whom, and the answer sets the ceiling before anyone reads your financials. We see it every week: a strong business surprised that the deposit which would buy the warehouse will not buy the pub, because the assessor is pricing the building’s next owner, not its current one.
How much deposit you actually need
For a standard commercial asset with full financials, plan on a deposit of 20 per cent of the lender’s valuation plus purchase costs, because the ceiling at most lenders for that asset class sits at or below 80 per cent of value. Some lenders will go further on very strong files, particularly for owner occupiers buying their own premises with a long trading history, and the ceiling falls as you move down the asset ladder, into short remaining leases, or into thinner financials. Specialised assets commonly require a materially larger deposit, and structures like SMSF lending require larger again.
Two practical rules follow.
- Ask what LVR the lender will apply to this asset before you agree a price, because the answer sets your deposit.
- Treat the deposit as a lever rather than a fixed cost. Every point of LVR you give up buys a sharper rate, and on a large facility the rate saving over the term can exceed the extra deposit many times over.
Deposit from LVR, on your numbers
The lender lends against its valuation, not your price; the deposit is whatever sits between the two. Enter the price, the valuation if you have one (leave blank to assume it matches the price), and the LVR ceiling the lender would apply to this asset. Purchase costs sit on top. Illustration only.
In short: ask what LVR the lender will apply to this asset before you agree a price, then treat every point of LVR you give up as buying a sharper rate for the life of the loan.
What LVR would a lender apply to your property?
A call with a former banker on the asset, the lease and your financials, and we tell you the ceiling each lender would work to and the deposit that follows.
Map my deposit, freeThe costs that sit on top of the deposit
Commercial purchases carry heavier transaction costs than residential ones, and they all come from the same pool of funds as the deposit.
- Stamp duty on commercial property is charged at each state’s transfer duty rates on the full price and is not reduced by the concessions that apply to some home purchases.
- GST may apply to the purchase price of commercial property unless the sale qualifies as a going concern or another exemption applies, which is a question for your accountant before the contract is signed, because it changes the funds required at settlement even where the GST is later recoverable.
- Legal and due diligence costs are higher, covering lease reviews, title and planning checks, and building and environmental reports where relevant.
- Lender costs include the valuation, establishment fees and legal fees, some of which are waived on competitive deals.
Budget for all of them alongside the deposit; a purchase that is funded to the deposit and not to the costs stalls at settlement.
Where the deposit can come from
- Cash is the simplest and the lender’s favourite.
- Equity in residential property is the most common substitute: a home or investment property can be offered as additional security, or equity can be released from it first and applied as cash, which keeps the two facilities separate. Our guides to commercial property equity release and cash out refinancing cover both routes.
- A self managed super fund can buy business real property, including the premises the members’ business trades from, using the fund’s own capital and, where the property meets the business real property test, a limited recourse borrowing arrangement; our SMSF commercial property guide sets out the rules that apply after the 2026 changes.
- Vendor terms and related party arrangements exist but are assessed cautiously and reduce the LVR lenders will offer.
How the deposit sets your rate
On commercial lending the deposit and the rate are one decision, because LVR is the biggest single input into pricing after the security type itself. A larger deposit lowers the lender’s exposure and moves the file into a sharper pricing band; a deposit at the ceiling leaves the file in the most expensive band the lender offers for that asset.
The practical exercise is to model two or three deposit levels against the pricing each attracts and the working capital each leaves in the business, then choose the point where the rate saving and the retained cash balance. Our commercial loan rates guide sets out the levers, and the commercial refinance calculator turns a rate difference into dollars over the term.
Frequently asked questions
How much deposit do you need for a commercial property loan in Australia?
For a standard commercial asset with full financials, plan on about 20 per cent of the lender’s valuation plus purchase costs, because the LVR ceiling at most lenders for that asset class sits at or below 80 per cent. Specialised assets, short leases, thin financials and SMSF or lease doc structures carry lower ceilings and therefore larger deposits.
What is the maximum LVR on a commercial property loan?
It depends on the asset. Standard offices, warehouses, industrial units and shops carry the highest ceilings, at or below 80 per cent of value at most lenders, with some going further on very strong owner occupier files. Specialised assets such as pubs, childcare centres, petrol stations and medical rooms sit lower, and SMSF and lease doc lending lower again.
Can I use equity in my home as the deposit for a commercial property?
Yes. Equity in a home or investment property can be offered as additional security for the commercial loan, or released first as cash and applied as the deposit, which keeps the facilities separate. Each route is assessed on the combined position and the residential property is at risk if the commercial loan fails.
Why is the deposit higher for a childcare centre or pub than for a warehouse?
Because the lender is pricing how easily it could sell the property if the loan went wrong. A warehouse has a broad buyer pool; a childcare centre or pub is tied to the business operating in it and its value falls if that business fails, so lenders cap the LVR lower and require a larger deposit.
Related guides
Twenty per cent is the starting point. Your asset sets the real number.
Bring the property and your financials. A former banker will tell you the LVR each lender would apply, the deposit that follows, and which lender prices it best.
Get the LVR each lender would apply to my asset, free