How to Refinance a Commercial Property Loan in Australia
Commercial Property Lending
Commercial refinance · Documents and timing · Valuation and costs · Lender options
A commercial property refinance can be planned or forced. You may be approaching facility expiry, dealing with non-renewal or covenant pressure, facing a repricing, releasing equity, carrying ATO debt, working with incomplete financials or refinancing a property with a short lease. This guide covers what to do first, the documents lenders ask for, the seven steps, timing, valuation and shortfalls, the real cost and break-even point, low-doc and lease-doc routes, ownership-structure exceptions, and what to check after settlement.
Quick Answer
To refinance a commercial property loan, a new lender pays out the old one. Get the payout figure and letter of facilities, compare lenders, apply, complete the new valuation and credit assessment, sign the offer and discharge documents, then settle. Work backwards from any lender deadline.
Also called: commercial loan refinance, commercial mortgage refinance, refinancing commercial property, switching commercial lenders.
Which situation are you in?
- The bank has written to say it will not extend the loan. How long you have, and who will refinance it: the triggers and their deadlines.
- You do not know where to start. What to ask for, and who to call, this week: the first week.
- The interest-only period is ending. Whether to switch to principal and interest or move: when an interest-only period ends.
- The margin went up at the annual review. Whether it is worth leaving once exit costs are counted: when the lender reprices.
- The bank has reserved its rights over a covenant. Whether you can refinance before it escalates: after a covenant breach.
- A new lender has offered less than you owe. Why it happens, and how to close the gap: why the offer comes in short.
- Your financials are not ready. Full-doc may not be the only route: low-doc and lease-doc refinance options.
- You have ATO debt or an ATO payment arrangement. It does not automatically end the refinance, but lender purpose and credit policy matter: how tax debt changes the lender pool.
- You want to pull cash out as well as refinance. Equity alone does not set the amount: how cash-out is limited.
- The property is held in an SMSF or LRBA structure. Treat it as a specialist refinance, not an ordinary company or trust switch: what changes for an SMSF refinance.
- You may miss the facility expiry date. Do not assume the old lender will extend: what to do before the deadline.
- You have settled and want to make sure the old bank is actually gone. What to check after settlement.
Nothing forcing you, and you just want a sharper rate or to release equity? Start with what a refinance costs, because the saving has to beat it.
What forces a commercial property refinance, and how long does each trigger give you?
How long you have depends on the trigger. A bank that subscribes to the Banking Code of Practice and decides not to extend a Code-covered Small Business loan that is not in default will give at least 3 months' notice; an interest-only expiry, covenant pressure or a recalled facility runs on the contract and the lender's notice; and a refinance you choose runs on your own timetable. The clock matters more than the rate, because it decides whether you can shop the loan properly or have to take the first lender that will settle on time.
Many commercial refinances start with a trigger rather than a voluntary rate shop. A facility can reach the end of its term and the bank may not roll it over, an interest-only period can end and change the repayment shape, a lender can reserve its rights over a covenant, or an annual review can come back with a higher margin. Other borrowers refinance by choice for price, structure, equity release or debt consolidation. If you want the basics of the product first, start with how commercial property loans work.
The table below puts every common trigger in one place: what the lender is doing, how much time you usually have, what decides the refinance, and which guide goes deeper. Two of the triggers are big enough to have their own pages. If a covenant is already the problem, read if a covenant has already been breached before you approach a new lender, and if the trigger is the end of an interest-only term, the detail on when an interest-only period ends covers extension, the switch to principal and interest, and the stay-or-go decision.
Scroll the table sideways to see every column.
| Trigger | What the lender is doing | How much time you usually have | What decides the refinance | Where the detail lives |
|---|---|---|---|---|
| Facility reaching expiry, not being extended | Declining to roll the loan over. | For a Code-covered Small Business loan not in default, at least 3 months' notice from a subscribing bank; otherwise whatever the contract says. | Valuation and interest cover at today's rates. | Facility not renewed guide |
| Interest-only period ending | Moving you to principal and interest, or asking you to refinance. | Set by the contract. | Serviceability on principal and interest. | Interest-only expiry guide |
| Rate review or renewal on new terms | Raising the margin or changing terms. | At a Code bank, a rate change is notified by the day it takes effect, unless the rate is variable, floating or set off an external reference rate; otherwise the contract. | Whether the new terms still fit the business case. | Business loan protections guide |
| Covenant under pressure | Reserving rights or asking for a cure. | Set by the contract and the lender's notice. | Whether a new lender accepts the current numbers. | Covenant breach guide |
| Facility recalled, repayment demanded | Requiring repayment. | Set by the notice. | Speed and documents. | Recalled facility guide |
| Better rate or equity release | Nothing: your choice. | Your timetable. | Cost against saving. | Cash-out refinance guide |
The pattern in the table is that only one row gives you a clock you control. Every other trigger is set by the lender's contract, the lender's notice or, for some bank borrowers, the Banking Code of Practice. Where a bank has decided not to extend, the 90-day plan when a bank will not renew sets out how to use the notice period in order. Where the bank is demanding repayment rather than declining to extend, the position on a recalled facility is different again, because the notice, not the term, sets the deadline. And where nothing is forcing you, the question is simply cost against saving, including when you are refinancing to release equity rather than to escape a lender.
The notice rules behind the table, read at source
- At least 3 months' notice. A bank that subscribes to the Banking Code of Practice and decides not to extend a loan will give notice at least 3 months before you need to repay in full, where you are not in default and the principal is not to be fully repaid by regular periodic repayments by the end of the scheduled term. Source: Banking Code of Practice 2025, paragraph 93, in Part B5 Lending to Small Business, ausbanking.org.au, in force from 28 February 2025, read 23 September 2026. Applies only to banks that subscribe to the Code, only to Small Business customers as the Code defines them, and only where you are not in default. Non-banks and private lenders are not bound by it.
- Financial covenants, restricted. On Small Business standard form loans, the Code allows financial indicator covenants or special covenants as a trigger for default-based action only on loans for property development and on specialised lending transactions, which the Code says include margin lending, loans to self-managed superannuation funds, bailment, invoice discounting, construction finance, foreign currency loans and tailored cash flow lending. Source: Banking Code of Practice 2025, paragraph 91, ausbanking.org.au, read 23 September 2026. Subscribing banks and Code-covered Small Business loans only. A loan outside the Code, or a larger borrower, can carry whatever covenants the contract sets.
These are the only two Code rules this section relies on. The mechanics of a covenant breach, and what a lender can do about one, sit in the covenant guide rather than here.
That second rule surprises people. If you are a Code-covered Small Business customer of a subscribing bank on an ordinary investment property loan, a covenant-driven refinance should be uncommon, because the Code keeps financial indicator covenants to development and specialised lending on those loans. Larger borrowers, and anyone outside the Code, can find covenants written into an ordinary facility, and so can a property held in a self-managed super fund, because the Code lists loans to those funds as specialised lending. If you are unsure what a covenant is doing in your own letter of offer, start with what a loan covenant is and then check the facility documents themselves.
What if the refinance will not settle before the current facility expires?
Do not assume the current lender will extend the facility because a refinance is underway. Ask in writing whether it will offer a short extension or rollover, what conditions and fees apply, and what must be completed before the expiry date. If an extension is not available, the practical fallback may be to contribute cash, add acceptable security, use a specialist or private facility with a documented exit, or sell or refinance another asset. Which options exist depends on the contract, the lender's notice and your security position. For a Code-covered Small Business customer who is not in default, the three-month non-extension notice described above can create planning time, but it does not automatically extend the loan past its contractual expiry.
What documents do you need to refinance a commercial property loan, and what should you do first?
Before a commercial property refinance is ready for a lender, collect the lender's notice or expiry date, a payout figure and letter of facilities, current financials or acceptable alternative income evidence, every current lease, the property and rates details, and the entity and guarantor information behind the loan. Start with the deadline and the security position first, because they decide which lenders can actually settle the refinance you need.
This is the week most borrowers lose. The letter from the bank arrives, the business keeps trading, and the refinance waits until a broker or a new lender asks for documents that take weeks to produce. Doing the groundwork first turns a forced refinance back into one you can shop.
Your first week, in order
- Find the date that matters. Read the lender's letter, or your letter of offer, for the expiry date, the notice given and anything the lender has asked you to do. Every other step works backwards from that date.
- Ask for a letter of facilities and a payout figure. Ask every bank you deal with, not only the one holding the mortgage, and ask for copies of the loan contract, the mortgage and any other security documents as well. A bank that subscribes to the Banking Code will give you copies of those documents within 30 days of your request. The wording below covers what to ask for.
- Ask your accountant where the financials are. If the latest year is not lodged, ask when it will be. A new lender may want it, and on a low doc path some lenders accept BAS and business bank statements instead.
- Gather the leases. Every current lease on the property, including any lease from your own business or a related entity, with rent reviews and options. The valuer reads the documents, not the arrangement.
- List what else the mortgage secures. An overdraft, business cards, equipment finance and bank guarantees, including one given to a landlord for premises you rent elsewhere. Each one needs a new home or new security before the mortgage can be released. An overdraft left behind at the old bank is usually repayable on demand, and the Code does not require the bank to give notice before it asks for repayment of an on-demand facility. If the mortgage also covers another property, read getting off cross-collateralisation first.
- Decide whether to ask your bank to reprice first. If the trigger is a margin increase rather than a refusal to renew, a competing offer in writing may be enough to settle it without moving.
Asking for a letter of facilities or a payout figure is a routine request. It does not commit you to leaving.
Have ready before you call a lender or broker
- The lender's letter, or the date the loan ends
- The letter of facilities and the payout figure
- The latest lodged financials and tax returns, or BAS and business bank statements for a low doc path
- Every lease on the property, the rent roll or tenancy schedule, the rates notice and the building insurance certificate
- A current statement of assets and liabilities for each borrower and guarantor
- Entity documents: company extract, trust deed
- One sentence on why you are refinancing and by when
What quietly slows the file
- Financials a year or more behind
- A lease that has expired, or was never signed
- A bank guarantee nobody remembered
- A deadline that assumes the discharge will be quick
- Several lenders run credit before one is chosen
What changes if you occupy the property, or lease it out
What we see on commercial refinance files Switchboard has worked on, as at September 2026.
- If your own business occupies the premises, the valuer will usually want the lease between your business and the entity that owns the property. Where there is no signed lease, or the rent was agreed informally, put a proper lease in place before the valuation.
- If you lease to an outside tenant, the conversation to start early is the renewal. A longer lease on the day of the valuation is worth more to a lender than the prospect of one.
- If you occupy the premises, plan valuer access around trading hours, and have the rates notice and any building or compliance paperwork to hand.
- If the property sits in your self-managed super fund and your business is the tenant, the lease needs to be on commercial terms and documented, and the refinance has to fit the fund's borrowing rules, so bring the fund's accountant in before a lender is chosen.
Owner-occupied and tenanted properties are also underwritten differently, which is set out in passive against owner-operated commercial property.
Indicative observation only, based on Switchboard broking files, as at September 2026. Every lender and valuer reads a file against its own policy. Not a quote or an indication of approval. Not financial advice.
Once those documents are in hand, the conversation with a broker or lender gets short. When you talk to a Switchboard broker, it is a free callback with no credit check, and the three things we ask for first are the lender's letter or the loan's end date, the payout figure and the leases, because those decide which lender types can meet your date before any application is lodged. If your deadline lands near the end of the financial year, the end of financial year refinance sequence sets out what to do in which order.
What happens to overdrafts, cards and bank guarantees when you refinance?
They do not automatically move with the property loan. If the old mortgage secures an overdraft, card, equipment facility or bank guarantee under an all-monies or shared-security clause, the outgoing bank may require that facility to be repaid, cancelled, replaced or re-secured before it releases the mortgage. A bank guarantee is particularly easy to miss because the landlord or beneficiary may still be holding it after the loan itself is ready to settle. Map every facility before you choose the new lender so the refinance does not solve the property loan and accidentally break the business banking around it.
Releasing the mortgage does not necessarily release every guarantor. If a guarantor also supports an overdraft, bank guarantee, card or another facility that stays with the outgoing bank, the guarantee may remain in place after the property loan is repaid. Ask the outgoing lender which guarantees will be released, which facilities they still support, and obtain written confirmation after settlement rather than assuming the discharge of the mortgage ended every guarantee.
How does refinancing a commercial property loan work, step by step?
Refinancing a commercial property loan runs in seven steps: get a letter of facilities and payout figure, gather indicative terms, apply with your documents, let the new lender value the property, receive approval and a letter of offer, sign the loan documents and the discharge authority, then settle. The first step decides how smoothly the other six go, because it is the only one that tells you, in writing, everything the outgoing bank holds against you and what it will cost to leave.
The seven steps of a commercial refinance, in order
- Letter of facilities and payout figure. Ask each bank for a letter listing every facility you hold with it, including cards, guarantees, leases and any loan-break or early termination fees, then ask for a payout figure on the loan you are refinancing.
- Indicative terms from lenders. Put the scenario to lenders, directly or through a broker: the property, the lease, the income, the balance, the trigger and the date you need to settle by.
- Application and documents. Lodge the financials, the leases, the entity documents and the details of the current loan with the lender you choose.
- Valuation. The new lender orders its own valuation from its own panel. In most cases you cannot substitute your current bank's report.
- Credit approval and letter of offer. The lender approves the loan, usually with conditions, and issues the letter of offer.
- Loan documents and discharge authority. You sign the new loan documents, and you sign the outgoing lender's discharge authority so it can prepare to release its mortgage.
- Settlement, discharge and new mortgage registration. The new lender pays out the old loan, the old mortgage is discharged and the new mortgage is registered, usually electronically through PEXA.
The order matters more than the speed. Steps one and four are where most of the surprises come from, and both can be started before you have chosen a lender.
The reason the letter comes first is that a commercial loan rarely stands alone. A business card, a bank guarantee for a lease, an equipment facility or an overdraft can all sit behind the same mortgage, and a bank will usually not release its security while something it secures is still outstanding. That is the practical problem behind security the old lender will not release: if the mortgage secures all monies you owe the bank, the refinance has to deal with every one of those facilities, not just the loan you meant to move.
The fourth step is the other one to plan around. The new lender's valuation is ordered by the lender, reported to the lender and read against the lender's own policy, which is why a refinance can come back with a lower limit than the balance you are trying to clear. Why a new lender can offer less than you owe explains why that happens and what to do about it. The whole sequence is, in the end, a straightforward version of refinancing: one lender repaying another. What makes it commercial is how much of the timetable sits with people other than you.
Scroll the table sideways to see every column.
| Stage | What happens | Who controls the pace | Where it commonly stalls |
|---|---|---|---|
| Letter of facilities and payout | Every facility and exit cost listed. | You and the current bank. | Facilities missed off the letter. |
| Indicative terms | Lenders respond to the scenario. | You, broker, lenders. | An incomplete scenario. |
| Application and documents | Financials, leases, entity documents lodged. | You and your accountant. | Missing or out-of-date financials. |
| Valuation | New lender's valuer inspects and reports. | New lender and valuer. | Access, lease documents, a lower value. |
| Credit approval and letter of offer | Approval with conditions. | New lender. | Conditions that cannot be met in time. |
| Loan documents and discharge authority | Documents signed; discharge requested. | Solicitors and outgoing lender. | Discharge processing; shared security. |
| Settlement and registration | Payout, discharge, new mortgage registered. | Both lenders and PEXA. | Payout figure mismatches. |
Where commercial refinances stall, in the order we see it
What we see on commercial refinance files Switchboard has worked on, as at September 2026. This is the order in which files tend to slow down, not a timeframe.
- The letter of facilities leaves something out: a card, a guarantee or a second facility tied to the same security, which only surfaces when the outgoing bank prepares its discharge.
- The valuation comes in under the balance, or the lease has shortened since the last valuation, so the approved limit no longer clears the loan.
- Interest cover fails at today's rates on the new lender's own assessment, even where the current loan has been paid on time throughout.
- The outgoing lender's discharge processing holds up settlement, especially where one mortgage secures several facilities.
- The financials on file are older than the new lender's policy allows, and a fresh set has to be prepared before credit will look at the application.
Indicative observation only, based on Switchboard broking files, as at September 2026. Every lender's policy and timing differ, and this is a pattern, not a prediction, a quote or an indication of approval. We give no timing on refinances driven by covenant pressure or a recalled facility, because those depend on the lender's notice and your own position. Not financial advice.
How long does a commercial property refinance take in Australia?
Allow several weeks rather than days for a straightforward commercial property refinance, and start earlier where a lender has given you a fixed expiry date. There is no single industry-wide timeframe because the valuation, credit conditions, loan documents and outgoing lender's discharge all run on separate clocks. Shared security, bank guarantees, stale financials, a lease problem or a valuation shortfall can extend the process. If the incoming lender is a bank that subscribes to the Banking Code and you are a Code-covered Small Business customer, ask it to confirm in writing what information it needs and the likely decision timeframe once that information is complete. A subscribing bank commits to tell a Small Business how to apply, what information it needs and how long after receiving it a decision is likely, under paragraph 76 of the Banking Code of Practice 2025.
What should you check in the new letter of offer before you sign?
Check the new letter of offer for the same things that forced this refinance, so you do not sign yourself back into the same position: the term and expiry date, any annual review clause, the covenants and how and when they are tested, the financial reporting you must provide and by when, whether the mortgage secures all monies you owe that lender, any annual review, line or facility fee, and the fees and break costs if you leave early.
If the new lender is a bank that subscribes to the Banking Code and you are a Small Business customer, it will give you a plain English summary of the key terms before you accept, and its standard form Small Business loan cannot make an unspecified material adverse change an event of default. A non-bank or private lender's letter of offer is not bound by either rule, so read it for a general material adverse change clause and ask what would trigger it.
Source: Banking Code of Practice 2025, paragraphs 80 and 92, ausbanking.org.au, read 23 September 2026. Subscribing banks and Code-covered Small Business customers only.The expiry date is the one to diarise. Set a reminder well before it, because the next refinance starts with the same first week as this one, and the borrowers who get the most choice are the ones who start before the lender writes to them. If the new facility carries an interest cover covenant, ask how it is calculated and when it is tested, then read what a breach triggers in the covenant breach guide before you sign rather than after.
What should you check after settlement?
Check five things after settlement: that the old mortgage has been discharged on the title, that the facilities you moved are live and the ones you closed are actually closed, that any bank guarantee was replaced and the landlord or beneficiary holds the new one, that direct debits and merchant settlements point at the right accounts, and that the first repayment date and amount on the new loan match the letter of offer. Do not close the old operating account early if direct debits, card settlements, payroll or guarantee fees are still using it.
Keep the letter of facilities, the payout statement, the settlement statement and the new letter of offer together. The next refinance, or the next annual review, starts with those four documents.
Why can a new lender offer less than you owe now?
A new lender does not inherit your current lender's view of you; it underwrites from zero. Its own valuation, interest cover re-tested at today's rates, the lease as it stands now, and your conduct on the current loan can each set a limit below your balance, even when you have never missed a repayment. The current bank's approval was made on a different valuation, a different lease and a different rate environment, and none of that carries across.
A lower or more conservative valuation is a common reason the new lender comes in short. The valuer reads the property and lease as they exist today, then the lender applies its own maximum loan-to-value and serviceability policy to that value. A shortening lease, holding-over tenant, vacancy, changed market rent or more specialised security can therefore affect both the valuation and which lenders remain available. Our guide to how far loan-to-value stretches explains why the same payout can fit one lender and miss another.
What if the lease is short, the tenant may leave or the property is vacant?
A short lease does not automatically stop a commercial refinance, but it can reduce valuation support and narrow lender choice. A lender and valuer may look at the firm remaining lease term, options, weighted average lease expiry where there are several tenants, tenant strength, market rent, incentives, vacancy and how specialised the property is. An unexercised option is not the same as a firm contracted term, and a related-party lease still needs to be commercially supportable rather than simply accepted at face value.
If your own business occupies the property, the lender may rely more heavily on the trading business's cash flow than it would on a passive investment. If the property is vacant, or the tenant is close to expiry, some lenders may reduce the amount they will lend or require more evidence about re-letting. Renewing the lease before the valuation can improve the evidence available to the valuer, but it does not guarantee a particular value or approval. Read how WALE and lease expiry affect a commercial loan and how the tenant can affect loan-to-value for the detail. If the valuation supports the requested loan-to-value but the serviceability test does not, paper equity alone does not create borrowing capacity.
How is interest cover re-tested when you refinance?
The interest cover ratio is the property's net income divided by the interest cost on the loan, and a refinance lender calculates it again at its own assessment rate, not at the rate you pay today. The interest cover ratio is the number that most often turns a clean refinance into a short one, because the income has not changed but the interest cost used in the test has. Some lenders test debt service cover instead, which counts principal repayments as well as interest, so the same property can pass one lender's test and fail another's.
That matters more in 2026 than it did two years ago. The cash rate target rose three times this year, and a lender re-testing interest cover now is doing it against a higher base than the one your current loan was approved on. A loan that passed comfortably at the original assessment can fail the same test at the new one without anything going wrong in the business.
Why the numbers move on a refinance, read at source
- Cash rate target 4.35%. The Reserve Bank raised the cash rate target by 0.25 percentage points three times in 2026, with effect from 4 February, 18 March and 6 May, to 4.35%, and left it unchanged at its June and August meetings. Source: Reserve Bank of Australia, cash rate target table, rba.gov.au, read 23 September 2026. The dates are the table's effective dates, one day after each board announcement. The cash rate is not the rate any borrower pays and not a lender's assessment rate; it is the base those rates move with. A later board decision may change it, so check the current figure.
- Capital weights rise with loan-to-value. Under APRA's standardised approach, a bank's commercial property loan that depends primarily on the property's own cash flows carries a risk weight of 70% up to a 60% loan-to-value, 90% from 60% to 80%, and 110% above 80%, with 150% for loans classed as non-standard. Source: APRA Prudential Standard APS 112 Capital Adequacy: Standardised Approach to Credit Risk, Attachment A, paragraph 23, commenced 1 July 2025, Federal Register of Legislation, legislation.gov.au, read 23 September 2026. Applies to authorised deposit-taking institutions using the standardised approach. It explains how bank capital responds to loan-to-value; it does not set your rate or your limit.
Neither figure is a rate or a limit you will be offered. They explain why a lower valuation or a higher assessment rate can reduce what a bank will lend on the same property.
The capital weights are the structural reason a lower refinance valuation bites at a bank. When the valuation falls, the same loan balance sits in a higher loan-to-value band, the bank has to hold more capital against it, and the loan becomes more expensive for the bank to carry. The result is either a lower limit, to bring the loan back into a cheaper band, or a higher price for staying where you are. In our experience that is the conversation behind most "we can only do less than you owe" answers, even when nobody says so in those words.
For ADIs using APRA's standardised approach, capital treatment is one structural reason a lower refinance valuation can matter more as loan-to-value rises. It is not a customer pricing table and it does not dictate an approval. The practical point is simpler: when the valuation falls, the same payout balance sits at a higher loan-to-value, and the new lender may respond by reducing the approved limit, changing the price or declining the structure under its own policy. That sits alongside the more direct constraints of interest cover, lease quality and the lender's maximum loan-to-value for the property type.
What a refinance lender tests again
- The valuation, on its own panel valuer's report
- Interest cover, at its own assessment rate
- The remaining lease and the tenant behind it
- Account conduct on the loan you are leaving
- The security type, against its own policy
What carries over from your current loan
- Your repayment history, as evidence rather than as approval
- The title and the security already registered
- The existing leases, as documents to be read again
An investor's facility ends in five months and the bank has said it will not extend. The anchor tenant has 18 months left on its lease, and the new lender's valuation comes in lower than the last one, so the lender limits the new loan below the balance. The investor's options, in order, are to secure a lease renewal first so the valuer can read a longer term, to pay the loan down or add security to close the gap, or to take a non-bank loan with a clear exit. The mechanics of that gap are the same as when the valuation comes in short at a purchase: the lender funds against its number, not yours. This is an illustration, not a prediction of any lender's response.
Can you refinance a commercial property and release equity at the same time?
Often, yes, but the available equity is not the same as the cash a lender will release. The new lender first sets the maximum loan it is prepared to approve from the valuation, loan-to-value, income or rent assessment, loan purpose and its cash-out policy. The existing payout and refinance costs then come out of that approved amount. A property can have substantial paper equity and still produce little or no usable cash-out if serviceability or policy sets a lower ceiling.
If equity release is the real reason for refinancing, say that at the start rather than after approval. The evidence is different because the lender needs to know where the extra funds are going. The detailed evidence and limits sit in the cash-out refinance guide.
What happens when your lender reprices at review, and when is that a reason to leave?
When a lender reprices at review, you can accept, negotiate with a competing offer in hand, or refinance, and leaving makes sense when the new terms break the business case, the facility is ending anyway, or the lender will not move once exit costs are counted. The Banking Code governs how a subscribing bank notifies a Code-covered Small Business customer, not whether it can make the change: a rate change is notified no later than the day it takes effect, unless the bank cannot give that notice because the rate is set off a money market or other external reference rate, or is designated variable or floating, so check which applies to your loan. Other unfavourable changes need at least 30 days' notice in most cases, and a bank that extends or refinances your loan does not have to keep the same terms.
Outside the Code, the contract does the work. Business-purpose credit generally sits outside consumer credit law, so a commercial property loan to a company or trust is governed by the loan contract, the Code where the lender subscribes, and the unfair contract terms law where the business and the contract fall within its thresholds. The rest of that framework, including the dispute route, is set out in the protections that apply to business loans, and this page does not repeat it.
What governs a rate review, read at source
- Notified by the day it changes, with exceptions. A Code bank that changes an interest rate will tell you as soon as reasonably possible but no later than the date of the change. Other unfavourable changes get at least 30 days' prior notice, subject to exceptions. Source: Banking Code of Practice 2025, paragraphs 35 to 37, ausbanking.org.au, read 23 September 2026. Paragraph 35 does not require that notice where the rate is calculated from a money market or other external reference rate, or is designated as variable or floating. Paragraph 37 allows shorter or no notice to manage a material and immediate risk, or for a government fee or charge. Subscribing banks only.
- Not on the same terms. If a Code bank decides to extend or refinance your loan, it is not required to do so on the same terms. Source: Banking Code of Practice 2025, paragraph 94, Part B5 Lending to Small Business, ausbanking.org.au, read 23 September 2026. Subscribing banks and Code-covered Small Business customers only.
- Business purpose, outside consumer credit law. The national credit law turns on the purpose of the credit: it catches an advance made predominantly for personal, domestic or household purposes, so credit for business purposes generally falls outside it. Source: ASIC, INFO 101 FAQs: Does the credit legislation apply?, asic.gov.au, page last updated 20 October 2020, read 23 September 2026. "Generally" matters: a loan to a natural person to buy, renovate or improve residential property for investment is regulated.
- Unfair contract terms, within thresholds. The unfair contract terms law protects a small business that employs fewer than 100 people or had turnover under $10 million in the last income year, on a standard form contract for a financial product or service where the upfront price does not exceed $5 million. Source: ASIC, INFO 211 Unfair contract term protections for small businesses, asic.gov.au, last updated March 2025, read 23 September 2026. Standard form contracts only, and only a court can decide that a term is unfair.
These rules set the notice and the fairness test around a change. They do not set a price, and they do not stop a lender reviewing a loan the contract allows it to review.
So the useful question is not whether the bank was allowed to lift the margin. It usually was. The useful question is whether the new terms still fit the business case for holding the property on this loan, and whether anything better is available once you count the cost of leaving. Government guidance for small business puts it in the same order: many lenders will renegotiate, particularly where you have a solid repayment history; non-banks are worth looking at as well as banks; check the exit fee; and work out whether the saving outweighs the costs over time.
Source: business.gov.au, Reduce your business loan costs, business.gov.au, published 8 April 2026, read 23 September 2026. General guidance, not advice. Optional further reading: the Australian Banking Association's small business guide to dealing with your lender.Negotiate first when
- The contract allows the review and the change is within it
- You hold a competing offer in writing
- The structure of the loan still fits the property and the plan
Refinance when
- The new terms break the business case for holding the property
- The facility is ending anyway
- The lender will not move, even with an offer in hand
A competing offer is the lever, but only if it is real. Before you ask your bank to match, make sure you understand what staying or moving lenders actually costs on your file, because an offer that disappears once the new lender's valuation comes back is not an offer. If the reason you need a new lender is extra working capital rather than the price of the senior loan, there may be a way of adding funding without reopening the senior loan at all. And if you want a sense of where the market sits before you negotiate, our read on what commercial property rates run at is updated separately from this guide.
An owner-occupier's bank lifts the margin on the loan at the annual review, inside what the contract allows. Rather than accept or leave on the spot, the owner asks every bank they deal with for a letter of facilities, adds up the exit costs against the saving on the best alternative, and goes back to the bank asking for a match with a competing offer in hand. The outcome depends on whether the bank moves. If it does, the owner stays and saves the cost of leaving; if it does not, the owner already has the numbers and the paperwork to refinance. This is an illustration, not a prediction of any bank's response.
What does refinancing a commercial property loan cost, and when does it stop being worth it?
A commercial refinance has two sets of costs: the ones the outgoing lender charges to let you go, and the ones the incoming lender and the land registry charge to set up the new loan. The saving has to beat both, over the time you realistically expect to hold the new loan, before the move is worth making. The costs of leaving are where refinances surprise people, and we deliberately give no amounts here, because every one of these depends on the lender, the loan, the state and the day you settle.
Scroll the table sideways to see every column.
| Cost | Leaving or arriving | Who charges it | Where you find the amount |
|---|---|---|---|
| Break costs | Leaving, if any part of the loan is on a fixed rate and you repay it before the fixed period ends. | Outgoing lender. | The payout figure. |
| Discharge fee | Leaving. | Outgoing lender. | The letter of facilities or the payout figure. |
| Early termination fee | Leaving, where the facility carries one. | Outgoing lender. | The letter of facilities. |
| Outgoing lender's legal costs | Leaving, where the facility documents pass them to you. | Outgoing lender. | The facility documents and the payout figure. |
| Valuation | Arriving. | New lender, or its panel valuer. | The indicative terms or the valuation quote. |
| Establishment fee | Arriving. | New lender. | The indicative terms and the letter of offer. |
| Your legal costs | Arriving. | Your solicitor or conveyancer. | Their quote. |
| New lender's legal costs | Arriving, where passed on to you. | New lender. | The letter of offer. |
| Registry fees | Both: discharge of the old mortgage and registration of the new one. | State land registry. | Your state land registry's current fee schedule. |
Registry fees are set by each state and change over time, so check your state land registry's current fee schedule rather than relying on a figure from anywhere else, including this page. There is no mortgage duty on the new mortgage in any Australian state or territory; New South Wales was the last to abolish it, from 1 July 2016. A refinance that also moves the property into a different entity is a different question, and one for your solicitor before you sign. If the refinance also increases the loan to release equity, the extra borrowing is its own decision with its own evidence requirements, which is what a cash-out refinance means in practice. Break costs only arise on a fixed rate portion.
Source for mortgage duty: Duties Act 1997 (NSW), section 203A, Abolition of mortgage duty, austlii.edu.au, read 23 September 2026. General information, not tax or legal advice.Do not compare rate alone. Compare the total cost over the period you realistically expect to keep the loan, using the same repayment structure. A lower monthly repayment can come from restarting the term or moving back to interest-only rather than from cheaper funding.
If all one-off switching costs were $12,000 and the new structure reduced the comparable monthly cost by $1,500, the simple break-even point would be 8 months. That does not prove the refinance is better: compare the same repayment structure, include ongoing line or facility fees, and consider how long you realistically expect to keep the new loan. The figures are illustrative only and are not a quote.
The test for whether it is worth it is simple to state and harder to do: add up every cost of leaving and arriving, compare it with the saving over the time you realistically expect to hold the new loan, and only move if the saving wins with room to spare. The interest-only expiry guide works through that comparison in more detail, including working out whether switching pays when the rate on offer is only slightly lower. The same logic applies to any commercial refinance: a lower rate on a loan you will refinance again in two years can cost more than it saves.
Does a lower repayment mean the refinance is cheaper?
No. A lower monthly repayment can come from a longer term, a fresh interest-only period or a different amortisation profile rather than a lower total cost. Compare the interest basis, ongoing facility or line fees, one-off switching costs, repayment type, term and exit fees on the same holding period. The refinance is cheaper only if the all-in cost over the period you expect to keep it is lower, not simply because the first repayment is smaller.
Which lender type fits your commercial property refinance, including low-doc and lease-doc options?
The right lender depends on why you are refinancing. A planned refinance with a strong lease and clean interest cover is bank territory. A refinance driven by a shortening lease, a bank that will not renew or a deadline you cannot move often is not, and the lenders who will do it ask for something in exchange: a higher price, a lower loan-to-value, a shorter term or a clear exit.
Scroll the table sideways to see every column.
| Lender type | Bound by the Banking Code? | Trigger it usually fits | What it asks in exchange | Trade-off |
|---|---|---|---|---|
| Major bank | Yes if it subscribes; Small Business protections only below the Code thresholds. | Planned refinance; a rate review. | Full documents, clean interest cover, strong lease. | Price against speed and flexibility. |
| Second-tier or regional bank | Yes if it subscribes; same thresholds. | Planned refinance; a rate review; some policy flex. | Similar evidence. | Policy flex against pricing. |
| Non-bank specialist | No; contract and general law govern, plus unfair contract terms law within its thresholds. | Expiry with a weaker lease; bank will not renew; lighter documents. | Higher rate or fees. | Flexibility against cost. |
| Private lender | No. | Short deadline; covenant pressure, as a bridge to a longer-term lender. | Higher cost, lower loan-to-value, short term, clear exit. | Speed against cost and term. |
AFCA's small business jurisdiction covers complaints against its member lenders from businesses with fewer than 100 employees, where the credit facility does not exceed $6,317,000 for complaints received from 1 January 2024; the protections guide explains how that route works.
Source: Australian Financial Complaints Authority, small business complaints and the adjusted monetary limits, afca.org.au, read 23 September 2026. Member lenders only, and AFCA adjusts the limits periodically, so check the current figure before relying on it.The debt test is the one that catches commercial property owners. It counts total debt across the whole Business Group, including undrawn limits and the loan you are applying for, so an investor with a modest property portfolio can sit outside the Code's Small Business protections on a refinance even though the business itself is small. In practice that means the Code column in the table is a question to check against your own numbers, not a promise, and for many commercial property borrowers the contract is the whole of the protection.
The market the refinance is going into, read at source
- Commercial property conditions, March 2026. The Reserve Bank reported that fundamentals improved and valuations increased across most commercial real estate markets over 2025; that strong competition from bank and non-bank lenders had contributed to some easing in lending standards; and that more specialist non-bank and private credit lenders had improved small businesses' access to credit. Source: Reserve Bank of Australia, Financial Stability Review, March 2026, Chapter 2: Resilience of Australian Households and Businesses, rba.gov.au, published 19 March 2026, read 23 September 2026 and still the latest issue on that date. Some markets remain weaker, including lower grade office and areas with high vacancies such as parts of Melbourne. A system-wide observation, not a statement about any lender or property.
A more competitive lending market widens the choice on a refinance. It does not change how a particular lender will read your valuation, your lease or your interest cover.
What the Reserve Bank describes matches the shape of the market we see: more lenders willing to look at a commercial refinance, and a wider gap between what a bank will do and what a non-bank lender will do on the same file. For a refinance the bank will not do, the non-bank path usually trades a higher price for more flexible policy on the lease or the income evidence, and a bank to non-bank refinance in practice shows how that plays out on a real file type. Private credit sits further along the same line. It is expensive and short, and it is built for a deadline, which is the ground covered by fast settlement finance; knowing how private lenders work matters before you sign, and so does planning the way back, which is what refinancing out of a private loan covers. If the refinance fits a mainstream profile, the product detail for commercial property loans is the next place to go.
A property owner's interest cover slips after the 2026 rate rises and the bank writes to reserve its rights under the facility. The owner has three broad options: cure the position with equity, refinance to a non-bank lender that will take the current numbers on tighter terms, or plan a sale that repays the loan on the owner's timetable rather than the bank's. Which one fits depends on the property, the lease and the owner's other resources, and the steps in between are set out in what to do after a covenant breach. We give no timing or likelihood on this kind of refinance. This is an illustration only.
Can you refinance a commercial property loan without full financials?
Sometimes. Low-doc and alt-doc lenders may accept evidence such as BAS, business bank statements or an accountant's declaration instead of a complete set of lodged financials, while lease-doc lending can assess a suitable tenanted commercial investment property primarily from the lease and rental income. None of these routes is no-doc: the lender still assesses the property, valuation, loan-to-value, credit conduct and the evidence required by its policy. A lighter-document route can also reduce leverage or cost more, so if full financials will be ready shortly, compare the cost of waiting with the cost of refinancing twice.
The distinction matters. Lease-doc lending is driven mainly by the property's rent and lease, while an alt-doc refinance replaces some standard income documents with alternative evidence. If the current loan is close to expiry, a temporary low-doc route can be a bridge to a later full-doc refinance, but only if the second set of switching costs is included before you commit.
Can you refinance a commercial property loan with ATO debt or a payment arrangement?
Sometimes. An ATO debt does not automatically make a commercial property refinance impossible, but it can narrow the lender pool and change the documents the credit team wants to see. Lender policy is not uniform: some specialist lenders will consider refinancing or consolidating an ATO balance, while other lenders exclude tax debt as a permitted loan purpose. The size and age of the debt, whether lodgements are current, whether a payment arrangement is being met, recent cash flow, available equity, credit conduct and the reason the debt arose can all affect the assessment.
Tell the broker or proposed lender about the ATO position before an application is lodged. Do not assume a payment arrangement makes the debt invisible, and do not assume equity alone makes the payout acceptable. The practical test is whether that lender accepts the purpose, whether the proposed loan fits its valuation and loan-to-value policy, and whether the resulting facility services. If tax debt is the main problem rather than a side issue, use the dedicated ATO tax debt finance guide and, where the debt has already been reported, how a reported business tax debt changes the lender read.
What changes if the commercial property is held in an SMSF or LRBA structure?
An SMSF limited recourse borrowing arrangement is not an ordinary company or trust refinance. The fund, the holding structure, the asset and the loan all have to remain inside the superannuation borrowing rules, and lender policy is usually narrower. If the refinance also changes the borrower, trustee, holding trust, property or security structure, stop treating it as a simple lender switch and involve the fund's accountant or solicitor before documents are signed.
For an existing LRBA, the finance question is whether the same asset and structure can be refinanced with the current or a new lender under the rules and that lender's policy. Related-party occupation and rent also need to be supportable on commercial terms. The detailed rules, including the current treatment of refinancing existing arrangements, sit in the SMSF property and business real property guide. This page does not give tax, superannuation or legal advice.
Refinancing a commercial property loan means a new facility paying out the old one after a fresh valuation and credit assessment. The move may be planned for price, structure, equity release or debt consolidation, or triggered by expiry, non-renewal, covenant pressure or repricing. The deadline and letter of facilities tell you what must be moved, the valuation, lease and serviceability tests tell you how much the new lender can actually advance, and the break-even calculation tells you whether a cheaper-looking offer is worth switching for. If full financials are not ready, low-doc, alt-doc or lease-doc routes may exist; ATO debt can narrow the lender pool; and an SMSF or LRBA refinance needs separate structural checks. After settlement, confirm the old mortgage, linked facilities and any guarantees that should end are genuinely released or replaced, because the refinance is not finished just because the property loan has settled.
Key takeaway: start with the deadline, payout and security map, then test valuation, serviceability and total switching cost before you choose the lender. A refinance that cannot clear the old payout or untangle the facilities behind the mortgage is not ready to settle, no matter how attractive the rate looks.Frequently asked questions about refinancing a commercial property loan
Usually yes, a commercial property loan can be refinanced before its term ends, but leaving early can have a cost. Break costs may apply to a fixed-rate portion that is repaid before the fixed period ends, and some facilities carry an early termination fee. Ask the current bank for a letter of facilities and payout figure first, because those show the exit costs before you commit to a new lender.
The cost of refinancing a commercial loan is the sum of the costs of leaving and the costs of arriving. Leaving can mean break costs, a discharge fee, the outgoing lender's legal costs and any early termination fee; arriving means the valuation, an establishment fee, your legal costs, mortgage registration and any lender legal costs. There is no mortgage duty on the new mortgage in any Australian state or territory. Amounts vary by lender and state, so price your own file and test it against the saving, as set out in the interest-only expiry guide's switching arithmetic.
Often, where the borrowed money is used to produce assessable income, but the timing and treatment depend on the expense. Section 25-25 of the Income Tax Assessment Act 1997 allows eligible borrowing expenses for income-producing borrowings to be deducted over the shorter of 5 years or the life of the loan, with expenses of $100 or less generally deductible immediately. The ATO also distinguishes borrowing expenses from costs of discharging a mortgage and from interest. Confirm the treatment of establishment, valuation, legal, broker, break and discharge costs on your own refinance with your registered tax agent. Source: ATO, business borrowing expenses, and Taxation Ruling TR 2019/2, read 23 September 2026.
The 2% rule is a residential rule of thumb, not a commercial lending rule. For a commercial refinance, test the actual costs of leaving and arriving against the actual saving over the time you expect to hold the new loan. If the saving does not clearly beat the costs over that period, the refinance is not worth doing on price alone.
A letter of facilities is a letter from your bank listing every facility you hold with it, including cards, merchant, trade and lease facilities, and loan details such as loan-break fees and early termination fees. Business Victoria's refinancing guidance recommends requesting one from every bank you deal with. It matters for a commercial refinance because a bank will usually not release a mortgage while anything it secures is still outstanding. Wording you can send to your bank is in the first-week section of this guide.
You do not have to announce a decision to get the documents you need. Asking for a letter of facilities and a payout figure is a routine request and does not commit you to leaving. If the trigger is a margin increase rather than a refusal to renew, government small business guidance suggests asking your lender to renegotiate first, particularly if you have a solid repayment history, and a competing offer in writing gives that conversation a number. Source: business.gov.au, Reduce your business loan costs.
A bank that subscribes to the Banking Code of Practice must tell you about a rate change as soon as reasonably possible and no later than the day it takes effect, unless it cannot do so because the rate is calculated from a money market or other external reference rate, or is designated as variable or floating. Outside the Code, the loan contract decides what notice you get. The business loan protections guide covers the wider framework.
Usually. Most commercial refinance lenders want a current valuation that meets their own panel and policy requirements, and they will not usually rely only on your current bank's report. If you paid for a commercial valuation your current bank received, a bank that subscribes to the Banking Code will give you a copy and the valuer instruction, except once enforcement proceedings have started, and it may limit how you use it. That copy helps you prepare, but the new lender's valuation is the one that sets the limit.
Generally no. New South Wales abolished mortgage duty from 1 July 2016 under section 203A of the Duties Act 1997 (NSW), the last state to do so, so no Australian state or territory now charges duty on a new mortgage. A refinance that does not change who owns the property does not trigger transfer duty either. What you do pay are land registry fees to discharge the old mortgage and register the new one. If the refinance also moves the property into a different company, trust or super fund, have your solicitor check duty before you sign. In Victoria, a dutiable transfer of 50% or more of a commercial or industrial property since 1 July 2024 can also bring it into the commercial and industrial property tax reform, which changes how it is taxed from then on. Source: Duties Act 1997 (NSW), section 203A, read 23 September 2026.
Each application you lodge with a new lender is usually recorded as a credit enquiry, and an assessor who sees several close together will ask why. Asking your current bank to reprice first, and shortlisting lenders on policy before anyone runs credit, keeps that trail short. How many credit enquiries is too many sets out what an assessor actually reads.
Often you can refinance a commercial loan after a covenant breach, though usually with a non-bank or private lender and on tighter terms than the loan you are leaving. The new lender will read the same numbers that caused the breach, so it prices and structures the loan around them. The steps before and after that decision are in the covenant breach guide.
A non-bank will often refinance a commercial property loan the bank will not renew, if the security and the exit stack up. Use the notice period well, as set out in what to do when your business facility is not renewed.
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