How long a commercial property loan runs in Australia, and why the loan term, the amortisation period and the facility expiry are different dates.
Property Lending Hub
Commercial Loan Term · Amortisation · Facility Expiry
Commercial property loans carry three dates that get mixed up: the loan term, the amortisation period and the facility expiry. Each controls something different, from your monthly repayment to the day you must repay, extend or refinance. This guide sets out how they differ and what decides them.
Quick Answer
The loan term on a commercial property loan depends on the lender and the property, and it is not always the date the whole balance must be repaid. The loan term, the amortisation period and the facility expiry are three separate dates, and each does a different job. Read all three before you compare two offers, because a long term on paper can still mean a shorter facility in practice. The commercial property loan glossary entry gives the base definition, and the commercial property loans page covers the product as a whole.
Also called: commercial mortgage term, commercial loan tenor. The loan term, the amortisation period and the facility expiry are three different dates, and people often use one word for all of them.
How long is a commercial loan term?
The loan term is the period the loan contract runs, and the lender sets it in the offer based on the property, the borrower and the lender's own policy. There is no single national rule that fixes it. Treat any range you see quoted online as a general observation, not a limit you can rely on.
The practical question is which date someone means. A figure described as the term may be the contract length, the period used to work out repayments, or the date a facility ends. These are three different things, and the sections below separate them. Where this commonly lands is two offers that look identical on the term but differ sharply on repayments and on what happens at the end.
For the basics of what the loan is and how the deposit and settlement work, see how commercial property loans work. The Property Lending Hub groups the wider lending structures for property if you are comparing options.
Can you get a 20 or 30 year commercial loan?
Some lenders will offer a term of this length on some properties, and others will not. What decides it is the lender's policy, the security property and whether the cash flow services the debt, not a fixed rule. Servicing is tested with measures such as the debt service coverage ratio and the interest coverage ratio, and each lender sets its own threshold. The term offered varies by lender, so the same borrower can receive different terms from different lenders.
A long term on paper does not mean the facility runs that long. A common outcome is a shorter facility on a longer repayment schedule, which is the structure the fourth section explains. Before you assume you have the full term, read the facility expiry in the offer letter.
What is the difference between loan term, amortisation and facility expiry?
Three dates sit on a commercial property loan, and each does a different job. Mixing them up is the most common reason two offers appear to disagree.
| Date | What it measures | Who sets it | What happens on the day |
|---|---|---|---|
| Loan term | The period the loan contract runs under its terms | The lender, in the offer | The contract runs to its end date, subject to its terms |
| Amortisation period | The period used to work out principal and interest repayments | The lender, in the offer | Nothing changes on the day; it sets the repayment amount |
| Facility expiry | The date the facility ends | The lender, in the offer | The balance must be repaid, extended or refinanced |
Note: the definitions above describe how the three dates work in the offer. They are not a statement of any lender's policy.
When the amortisation period runs past the facility expiry, the repayment is calculated over the longer period, and the balance still owing at expiry falls due in full. That is why the refinance plan matters. A balloon payment works on the same principle, and the commercial bullet loan post covers the case where the whole principal falls due at the end. The interest-only guide covers the separate case where no principal is repaid during the term.
What decides the term a lender offers?
Four factors drive it, and no single one settles the answer. What lenders actually look at first is the security property, because its type, age and location affect how long a lender will lend against it. The valuation is part of that picture, and the valuation guide sets out what gets tested.
Serviceability comes second. The lender tests whether the business or the rental income covers the repayments, using a serviceability test on the figures. A shorter facility can make a tight cash flow work on a longer schedule, provided the lender accepts the expiry date. The third factor is the lender's policy on the property type and the purpose of the loan. The fourth is the borrower's history, including the credit file and the loan-to-value ratio the lender is prepared to accept.
A common pattern is a shorter facility with a longer amortisation. That keeps repayments manageable while the lender keeps its review rights. The structure only works if a refinance at expiry is realistic, so test that plan before you sign.
How does the term change your repayments?
The amortisation period has the largest effect on the monthly repayment. A longer period spreads the principal over more months, so each repayment is lower, but more interest is paid over the life of the loan. Interest-only repayments are lower again in the short run, because no principal is paid, and the full balance is still owing at the end.
The table below uses one invented example to show the arithmetic. The loan amount and the rate are not a rate quote or an offer, and the 8 per cent a year is there only so the numbers are easy to follow.
| Amortisation period | Principal and interest, a month | Interest only, a month |
|---|---|---|
| 15 years | about $9,557 | about $6,667 |
| 25 years | about $7,718 | about $6,667 |
| 30 years | about $7,338 | about $6,667 |
Worked example: arithmetic on an invented $1,000,000 loan at an illustrative 8 per cent a year, calculated monthly and rounded to the nearest dollar. Interest only means no principal is repaid during the period, so that column does not change with the amortisation period. This is not a rate, an offer or advice. Read 3 November 2026.
A shorter amortisation means higher repayments on the same balance, which is why a longer schedule may suit a business with tighter cash flow. For rate context, see the commercial property loan rates guide.
What happens when a shorter facility ends?
When a facility ends before the balance is repaid, you repay it, extend it or refinance it. The timing, the notice and the steps are covered in the expiry guide, so this section covers only the protections that apply before that day.
The Banking Code of Practice 2025 treats a small business as one with turnover under $10 million, fewer than 100 full-time equivalent employees and total debt under $5 million. The Code binds only the banks that subscribe to it, and a code bank has no duty to extend a loan, so a facility can still end on its expiry date. The Australian Banking Association publishes the Code.
ASIC's guidance on disputes about commercial loans says commercial loans have the lowest level of protection. That is why the facility letter matters more than the headline term. Whether a particular expiry can be negotiated is a question for your solicitor.
Sources: Australian Banking Association, Banking Code of Practice 2025, approved by ASIC on 27 June 2024, read 3 November 2026. ASIC, INFO 207, disputes about commercial loans, reissued 19 April 2024, read 3 November 2026.
Commercial property loan terms are three separate dates. The loan term is the contract period, the amortisation period sets the repayment, and the facility expiry is the day the balance must be repaid, extended or refinanced. Most confusion comes from treating them as one figure, so read all three in the offer before you compare lenders on monthly repayment alone.
Key takeaway: Read the loan term, the amortisation period and the facility expiry as three separate dates, and check the refinance plan for the expiry day before you sign.Frequently Asked Questions
Commercial real estate loan terms are the contract period, the amortisation period and the facility expiry, and each is set in the lender's offer. The term alone does not tell you how much you repay each month or when the balance is due. Read the three dates together, and see commercial real estate debt in Australia for the wider product picture.
A commercial term loan is a loan with a set contract period and a repayment schedule, and for property the security is a mortgage over the building. The schedule and the facility expiry can differ, so check both in the offer. The commercial property loan entry in the glossary sets out the base definition.
A commercial property loan term in Australia is set by each lender's offer on the property and the borrower's circumstances, not by a single national limit. Quoted ranges often mix up the loan term, the amortisation period and the facility expiry, so check which date the figure describes. The types of commercial property loans guide explains the product families before you compare terms.
The payment on a $1,000,000 commercial loan depends on the rate, the amortisation period and whether the loan is principal and interest or interest only. On an invented example at an illustrative 8 per cent a year, principal and interest is about $9,557 a month over 15 years, about $7,718 over 25 years and about $7,338 over 30 years. That is arithmetic, not a rate or an offer, so test your own figures with the commercial property loan calculator.
A longer commercial loan term usually lowers the monthly repayment but generally increases the total interest paid, because the balance is carried for longer. Whether a longer facility carries a higher rate depends on the lender's pricing, which varies by lender. The balloon payment entry explains why a balance left at expiry changes the picture.
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