Refinance / Restructuring
How Does Property Loan Refinancing Work?
5 min read- Finance Guide
- Updated 2026
Quick answer
Lenders typically refinance up to
60% 80%
Of the property value
- Assessment bases LVR + serviceability
- Loan structure options IO or P&I
- Rate options Fixed or variable
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Key concepts in refinancing
Loan to value ratio
Typically 60% to 80% — sometimes higher for lower risk scenarios and strong borrower profiles
Property valuation
A new valuation is ordered at refinance — this directly determines the maximum loan available
Serviceability
Assessed using current income and expenses — new lender applies their own serviceability policy
Purpose of refinancing
Rate reduction, term change, equity release — purpose affects which lenders and products are suitable
Loan structure options
When refinancing, borrowers can select a new loan structure to better suit their current objectives.
Repayment type
Interest only or P&I
Choose between interest-only periods or principal and interest repayments
Rate type
Fixed or variable
Lock in certainty with a fixed rate or maintain flexibility with variable
Loan term
Reset or extend term
Terms can be reset or extended to reduce repayments or shorten the loan
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Lender Criteria
Lenders normally review the following when assessing a refinance application:
-
01. Updated financials and tax returnsIncome evidence
-
02. Repayment history on existing loanCredit conduct
-
03. Asset quality and locationSecurity quality
Common problems with Commercial Property Loans
Low valuation
A lower-than-expected property valuation can limit refinance proceeds and reduce the available loan amount.
Possible solutions include:
Reduce the
requested LVR- Provide
additional security
- Obtain
alternative lender assessment
Break costs or fees
Exit fees or fixed rate break costs can reduce or eliminate the financial benefit of refinancing.
Possible solutions include:
- Compare total
cost over the term
- Time refinance
near fixed expiry
- Negotiate fees
with existing lender
Serviceability shortfall
Income or expenses may not meet the new lender's serviceability policy, even if the existing loan is being serviced.
Possible solutions include:
- Reduce the loan
size requested
- Extend the loan
term
- Include
additional income or guarantor
Steps to get refinancing
Step
01
Identify the commercial property the company intends to purchase
Step
02
Estimate property value and target LVR
Step
03
Prepare financial documents and statements
Step
04
Select suitable lenders and products
Step
05
Submit application and order valuation
Step
06
Complete approval, discharge, and settlement
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