Written by

Steven Lee

Mortgage Director, ODIN Mortgage & Tax

10+ years in Australian banking and mortgage lending

Last reviewed

Updated on: June 10, 2026 View profile →

Refinance Commercial Property in Australia

Imagine your business revving for growth, but your commercial property loan is stuck in low gear. In Australia’s shifting landscape—where vulnerability meets opportunity—such outdated debt is holding back many firms.

For example, Australia’s commercial property sector saw vacancy rates of 14.1% in the office space in Q1 2025, underscoring risk in underperforming assets.

Refinancing your commercial property loan is one of the smartest strategic moves you can make: it can unlock trapped equity, improve cash flow, and create breathing room for expansion—or simply smarter operations. With over 50% of lenders predicting two more rate cuts in 2025, timing is on your side.

This guide is your comprehensive roadmap. You’ll discover when the right moment strikes, how to refinance commercial property, what it actually costs, what risks to watch, and how to pick the right lender to match your business goals.

Let’s get started and put your loan back in high performance.

When Is the Right Time for a Commercial Loan Refinance?

Timing your refinance is a strategic decision that requires balancing your business needs with market conditions.

Acting too soon can lead to unnecessary costs, while waiting too long might mean missing out on significant savings.

The ideal moment often depends on a combination of market-driven opportunities and business-specific milestones.

Understanding these triggers will help you decide if now is the right time to refinance your commercial loan. Proactive planning is key, especially if you have a loan with a balloon payment on the horizon.

Market-Driven Triggers: Rates and Property Values

External economic conditions create windows of opportunity. Falling interest rates and rising property values are key triggers.

When interest rates in the market are lower than your current rate, it’s a clear sign to consider refinancing. This can directly reduce your servicing costs.

Similarly, if your property’s value has significantly increased, your Loan-to-Value Ratio (LVR) decreases. A lower LVR reduces the lender’s risk, making you eligible for more competitive rates and terms.

👉 Learn more: Should I Refinance My Mortgage After RBA Rate Cuts?

Business-Specific Triggers: Growth and Loan Maturity

Your business’s internal developments are just as important. Improved performance or a change in strategy can signal it’s time to refinance.

If your business’s revenue and profitability have grown, you are in a much stronger negotiating position for a better loan.

Additionally, a loan structure that worked for a startup may not suit a growing enterprise. The most critical trigger, however, is an approaching loan maturity or “balloon payment,” where the entire remaining balance is due.

You must refinance or sell, making proactive planning essential.

The "Refinancing Sweet Spot"

There is a generally accepted “sweet spot” to refinance commercial property. Experts suggest reviewing your loan every 18 to 24 months.

This timeframe strikes a healthy balance. Refinancing too often can negatively impact your credit file due to multiple inquiries.

However, leaving a loan for too long likely means you are missing out on potential savings as the market changes and your business grows.

When NOT to Refinance

Refinancing is powerful, but not always the right move. There are specific situations where you should avoid it.

If the upfront costs, like break fees and establishment fees, outweigh the long-term savings, it is not financially viable.

It’s also a poor strategy to use refinancing to cover up deeper business problems, such as chronic unprofitability.

If your business is in severe financial distress, a new lender is unlikely to approve your application. It’s better to first negotiate hardship assistance with your current lender.

👉 Also see: 10 Reasons Not to Refinance Your Mortgage

👉 Learn more: When to Refinance Your Mortgage in Australia

The Commercial Property Refinance Process

The commercial refinance journey follows a structured path from initial review to final settlement.

A methodical approach at each stage can significantly improve your chances of securing a favourable outcome.

Understanding these steps will help you navigate the process with confidence and clarity.

From defining your goals to preparing your documents and settling the new loan, being organised is key. This blueprint demystifies the process, making it more manageable for you.

1. Review Your Goals and Current Loan

Before approaching any lenders for commercial property refinance, conduct a thorough internal review. This ensures your refinancing effort is aligned with clear goals.

Get a complete picture of your existing loan, including the remaining balance, interest rate, and any break costs.
Assess your business’s recent financial performance, as lenders will scrutinise this.
Define your “why”—whether it’s to lower repayments, access cash, or consolidate debt—to guide your decisions.

👉 Also see: Refinance Investment Property in Australia

2. Research Lenders and Compare Options

With your objective clear, it’s time to explore the market. Do not just accept the first offer you receive.

Your search should include a range of lenders, from major banks to non-bank specialists.

For most, partnering with an experienced commercial finance broker is the most efficient path. A broker brings deep market knowledge, access to a wide panel of lenders, and the expertise to structure your application for success.

3. Prepare Your Application Documents

The strength of your commercial property refinancing application depends on your documentation. Being well-organised demonstrates financial responsibility to lenders.

The required documents vary. A standard ‘Full Doc’ application usually requires two years of tax returns and financials.

For self-employed borrowers, a ‘Low Doc’ option allows for alternative income verification, such as business bank statements or a letter from your accountant.

For investment properties, a ‘Lease Doc’ loan is assessed primarily on the property’s rental income.

👉 Check out: Documents Required for Refinancing in Australia

4. Undergo Lender Assessment and Valuation

Once submitted, your application enters the underwriting stage. The lender performs its formal due diligence and risk assessment.

The lender conducts a credit check and verifies your financial information. A critical step is an independent valuation of your commercial property.

This valuation determines the maximum loan amount the lender will offer based on their LVR policy.

👉 Learn more: Property Valuations & Appraisals for Refinancing

5. Receive Your Offer and Settle the Loan

If your application is successful, the lender will issue a formal loan offer. Once you accept, the process moves to the final settlement stage.

The loan offer outlines all terms and conditions, which you must review carefully. To finalise, notify your old lender to “discharge” the existing mortgage.

On settlement day, the new lender pays out the old loan, and the new mortgage is registered against your property title. Your new repayments will typically begin within a month.

👉 Discover How to Refinance a Home Loan in Australia the smart way.

AU Expats—Find Commercial Refinancing Complex?

Commercial Property Refinancing Costs

While refinancing commercial property can offer substantial long-term savings, you must analyse the upfront costs.

The costs fall into three main categories. These are the exit costs from your current lender, upfront costs with the new lender, and government fees.

Fee Category	Fee Type	Typical Cost (AUD)	Notes
Exit Costs	Discharge Fee	$300 – $500	Administrative fee from your old lender to close the account.
	Break Costs	Variable (Potentially $10,000+)	Applies to fixed-rate loans. A precise quote is essential.
Upfront Costs	Application / Establishment Fee	0.75% – 1.25% of loan amount	Fee from the new lender to set up the loan. Can be negotiable.
	Valuation Fee	$2,000 – $20,000+	Mandatory fee for property assessment. Varies by property complexity.
	Legal Fees	$1,500 – $5,000+	Borrower pays the new lender’s legal costs for document preparation.
Government Fees	Mortgage Registration Fee	~$110 – $200	State government fee to register the new mortgage on the title.
	Stamp Duty	Variable	Generally only payable on the increased portion of a cash-out refinance.
Ongoing Fees	Annual / Monthly Service Fees	Variable	Some lenders charge ongoing account-keeping fees.

These expenses can be significant and must be weighed against the potential benefits to ensure the transaction is worthwhile. A successful commercial refinance loan is one where the financial gains comfortably outweigh the initial outlay.

Exit Costs from Your Current Lender

Closing your old loan account will likely incur fees. The largest potential cost is the break fee.

Your outgoing lender will charge a discharge fee, typically a few hundred dollars, for finalising the account.

If you’re on a fixed-rate loan, you’ll likely face a break cost for ending the term early. This fee can be substantial, so it’s crucial to get an accurate quote from your current lender before proceeding.

👉 Learn more: Can You Refinance a Fixed Loan? Fixed Rate Mortgage Refinance

Upfront Costs with the New Lender

Setting up the new loan involves several fees. This includes an application fee and a valuation fee.

The new lender charges an application or establishment fee to cover their setup costs, often 0.75% to 1.25% of the loan amount.

You must also pay for a formal property valuation, which can cost anywhere from $2,000 to over $20,000, depending on the property’s complexity.

Finally, you’ll typically need to cover the lender’s legal fees for preparing the loan documents.

Government and Ongoing Fees

State governments charge fees for property transactions. Your new loan may also have ongoing account fees.

A mortgage registration fee is payable to the state’s Land Titles Office to register the new mortgage.

While stamp duty is generally not payable on a simple refinance, it may apply to the increased portion of a cash-out loan.

Be sure to also check for any ongoing annual or monthly service fees associated with your new loan account.

👉 Also see: Do I Have to Pay Stamp Duty When Refinancing?

👉 Learn more: How Much Does It Cost to Refinance a Home Loan?

Risks When You Refinance Commercial Property

While the benefits are compelling, a smart decision requires assessing the risks.

Factors like higher interest rates and valuation uncertainty have elevated the risk profile for commercial lending and refinancing.

Understanding these challenges allows you to plan effectively. This knowledge will help you avoid potential pitfalls and navigate the refinancing process with greater awareness.

Economic Headwinds: Higher Rates and Demand Shifts

The broader economy has created direct challenges. Higher interest rates increase debt-servicing costs for many borrowers.

This pressure on profitability can erode your Interest Coverage Ratio (ICR), a key metric lenders use.

At the same time, structural shifts, like the rise of hybrid work, have weakened demand for some office and retail spaces. This can impact a property’s ability to generate rental income, which in turn affects its valuation.

The "Double Squeeze": Valuation Risk and Funding Gaps

A primary concern when refinancing commercial property is the risk of a “funding gap.” This occurs when falling property values and tighter lending standards combine.

Falling property values cause your LVR to rise, while lower rental income and higher rates cause your ICR to fall.

This “double squeeze” can lead to a serious problem. A new lender may value your property lower than expected and, applying a conservative LVR, offer a loan that is not large enough to pay out your existing one.

This creates a funding shortfall that you must cover with cash, or you may be unable to refinance.

The Hidden Costs of a Bad Refinancing Decision

You must look beyond the immediate market risks. Some commercial property refinance decisions can have hidden long-term costs.

For example, extending your loan term to reduce monthly payments might seem attractive. However, it can result in you paying significantly more interest over the life of the loan.

Also, consider the value of your existing banking relationship before switching lenders, especially if you rely on other services from that institution.

👉 Also see: Australian Refinancing Myths and Reality Checks

Choosing the Right Commercial Refinance Lender in Australia

The Australian commercial finance market is diverse, with different lenders suiting different needs. Choosing the right one is as vital as securing a low rate.

Understanding this landscape is key to finding a partner that aligns with your specific circumstances and goals.

Lender Type	Ideal Borrower Profile	Typical Max LVR	Key Advantage	Key Disadvantage
Major Banks	Strong financials, standard property, low-risk profile.	65% – 70%	Lowest interest rates.	Strict credit policies, less flexible, slower process.
Non-Bank Lenders	Self-employed, complex income, requires higher LVR.	70% – 80%	High flexibility, faster approvals, higher LVRs.	Higher interest rates and fees.
Private Lenders	Urgent funding need, highly complex deal.	Up to 75%	Speed and ultimate flexibility.	Very high interest rates, short loan terms.

Each lender type has a distinct risk appetite, product offering, and ideal customer. From major banks to private funders, your choice will depend on your financial situation and the nature of your property.

Major Banks

Major banks are the traditional pillars of commercial lending. They are generally the most competitive on price.

Australia’s “Big Four” banks are ideal for straightforward, low-risk applications. This includes standard commercial properties with strong tenants.

While they offer the lowest rates when you refinance commercial property, their credit policies are often rigid. Their LVRs are also typically capped at 65-70%.

Second-Tier and Non-Bank Lenders

This growing segment fills the gap left by major banks. They are known for their greater flexibility.

Non-bank lenders are often the go-to for more complex applications, such as for self-employed borrowers or those with minor credit issues.

They are often willing to lend at higher LVRs (up to 80% in some cases) and have faster turnaround times, though their rates and fees are generally higher to compensate for the additional risk.

Private Lenders

Private lending is a specialist market for urgent or complex deals. They offer unparalleled speed and flexibility.

These lenders focus more on the property’s value than the borrower’s history. They are suitable for short-term bridging finance or distressed asset scenarios.

This flexibility comes at a very high cost, with high interest rates and short loan terms, making them unsuitable for long-term financing.

The Value of a Commercial Finance Broker

Navigating this complex lender landscape can be challenging. An experienced commercial finance broker acts as your advocate.

A good broker has deep knowledge of the market and can match you with the right lender.

They structure your application, negotiate on your behalf, and manage the process from start to finish. This can save you significant time, money, and stress.

👉 Check out: Aussies Turning to Small and Mid Tier Banks to Refinance

FAQs when You Refinance Commercial Property in Australia

Here are some commonly asked questions when you refinance commercial property in Australia.

Can you refinance a commercial loan?

Yes, you can refinance a commercial loan in Australia. While the process is similar to refinancing a home loan, there are also significant differences.

Commercial loan rates are highly negotiable, unlike advertised home loan rates. Terms are shorter, often with a final balloon payment.

How soon can I refinance a commercial loan?

The recommended time is typically 18 to 24 months after starting your loan.

This avoids too many inquiries on your credit file while ensuring you don’t miss out on better deals as the market evolves.

👉 Learn more: How Soon Can You Refinance a Mortgage?

Can I refinance a fixed-rate commercial loan?

Yes, but breaking a fixed-rate term early will likely incur significant break costs.

You must calculate if the savings from a new, lower rate will outweigh these substantial upfront fees.

What is a typical LVR for a commercial refinance?

Major banks usually cap their LVR at 65-70%.

Specialist non-bank lenders may offer higher LVRs, sometimes up to 80%, though often at a higher interest rate.

Can I get a commercial loan refinance with bad credit?

It’s possible through specialist non-bank lenders.

They are more flexible than major banks but expect to pay a higher interest rate and fees to compensate for the perceived risk.

What's the difference between a full-doc and low-doc refinance?

A full-doc loan requires comprehensive income proof, like two years of tax returns.

A low-doc loan is for self-employed borrowers who can verify income with alternatives like business bank statements or an accountant’s letter.

Do I need a deposit to refinance?

You don’t need a cash deposit, but you must have sufficient equity in the property.

For example, to refinance at an 80% LVR, you need at least 20% equity based on the new valuation. This equity acts as your contribution.

The key to refinancing your commercial property lies in a disciplined, strategic, and proactive approach. Navigating this complexity is best done with an expert on your side.

AU Expats—Refinance Commercial Property in Australia

Key Takeaways

The right time to refinance commercial property depends on market triggers, business growth, or your loan’s maturity date. ⬆️
The process is a structured path from goal-setting and research to application, valuation, and final settlement. ⬆️
Be prepared for exit fees, new lender application and valuation costs, and government charges. ⬆️
Key risks include valuation uncertainty, potential funding gaps, and the hidden costs of longer loan terms. ⬆️
Choose from major banks, non-banks, or private lenders based on your risk profile and flexibility needs. ⬆️

Refinance Commercial Property in Australia

When Is the Right Time for a Commercial Loan Refinance?

Market-Driven Triggers: Rates and Property Values