Refinance / Restructuring
Can You Refinance Commercial Property Loans?
5 min read- Finance Guide
- Updated 2026
Quick answer
Commercial refinance often sits around
60% 75%
of commercial property value
- Assessment bases LVR, income and security
- Common uses Rate reduction or equity release
- Costs to review Valuation, legal and break costs
1300 421 044
1300 421 044
Key concepts in commercial refinancing
Loan to value ratio
Typically 60% to 75% — sometimes higher for lower risk scenarios and strong borrower profiles
Property valuation
A new commercial valuation is commonly ordered and directly affects maximum leverage, equity release and lender appetite
Serviceability
Assessed using lease income, business income, interest cover, borrower strength and the new lender's servicing method
Purpose of refinancing
Rate reduction, equity release, debt consolidation, expiry rollover or cash flow improvement all affect lender choice and structure
Why borrowers refinance commercial property
Commercial borrowers refinance for a range of reasons. The right structure depends on the property, leases, business cash flow and what the refinance is meant to achieve.
Lower cost
Reduce rate or margin
A refinance may move the debt to a lender with better commercial pricing or more suitable margins and fees
Equity release
Unlock capital
A higher valuation or lower existing debt may allow funds to be released for working capital, investment or renovations
Restructure debt
Change term or repayments
Borrowers may refinance to reset the term, move to interest only for a period, or consolidate multiple debts into one facility
Need Help with your Project?
What lenders usually assess
Commercial lenders normally review a broader set of inputs than a standard residential refinance:
-
01. Updated financials, tax returns and entity structureBorrower strength
-
02. Lease profile, rental income and existing repayment conductCash flow quality
-
03. Property quality, location and valuationSecurity strength
Common problems with commercial refinancing
Valuation comes in low
A lower than expected commercial valuation can reduce the refinance limit, block equity release or force extra cash into the deal.
Possible solutions include:
Reduce the requested LVR- Provide additional security
- Target a lender with stronger appetite for that property type
Fees or break costs are too high
Break costs, discharge fees, valuation fees, legal costs and new loan establishment fees can reduce or wipe out the benefit of switching.
Possible solutions include:
- Compare the total refinance cost against the likely savings
- Time the refinance around fixed expiry or a more favourable break cost point
- Negotiate with the existing lender before exiting
Income or lease profile is too weak
A new lender may be less comfortable with short WALE, vacant space, specialised property, volatile business income or high existing debt.
Possible solutions include:
- Reduce the requested debt or equity release amount
- Adjust term or repayment type where policy allows
- Use stronger financials, extra security or a lender better suited to the asset
Steps to refinance a commercial property loan
Step
01
Review the existing commercial loan, current rate, term and refinance objective
Step
02
Estimate current property value, debt level and target LVR
Step
03
Prepare financials, lease schedules, statements and entity documents
Step
04
Target lenders suited to the property type, lease profile and borrower strength
Step
05
Submit the refinance application and allow for commercial valuation
Step
06
Complete approval, discharge the old loan and settle the new facility
Speak with a Property Finance Specialist
Commercial refinance scenarios can vary significantly depending on the property type, valuation, lease profile, borrower financials and the amount of debt being refinanced.
A specialist can review the property and debt position and help identify which lenders may be willing to refinance it and on what terms.
Speak with a finance specialist about your commercial refinance.
Submit the short form below and a specialist can review your commercial property, current debt structure and likely refinance options.
Contact Form
Your enquiry is confidential
Prefer to speak with someone directly ?
Call us to discuss about your project finance queries
Additional Questions
You may also find these questions helpful
