Compare commercial property loans on the same balance, purpose and expected holding period. The advertised interest rate is only one input: repayment structure, security and conditions can change both cash flow and total borrowing cost.

Build a like-for-like comparison

Start with your current loan balance, rate, maturity, repayment amount, repayment type and payout figure. Ask each lender for written indicative terms based on the same property and borrower details. Record whether pricing is fixed or variable and when it can change. A fixed quote may have break terms; a variable facility can change after settlement. No comparison is an approval until the lender assesses the application.

Use this comparison checklist

Fees: establishment, valuation, legal, annual or account fees, discharge and potential break charges. Term: maturity date, renewal process and total interest over your likely holding period. Repayments: interest-only versus principal-and-interest, frequency and any balloon amount at maturity. Reviews: financial reporting, periodic valuations and lender repricing rights. Covenants and security: loan-to-value tests, guarantees, cross-collateralisation and default conditions. Cash-out: whether extra funds are permitted, their acceptable purpose and evidence needed. Flexibility: additional repayments, redraw or offset if actually offered, early payout and ability to change repayment type. Confirm each feature in the proposed terms, not an advertisement.

For example, an interest-only offer may improve short-term cash flow compared with principal-and-interest, but the principal remains outstanding unless repaid separately. A longer term can also lower the regular payment while increasing total interest. Compare both total expected payments and the debt left at the end of the period.

Match the lender to the property and borrower

Warehouse, retail, office and specialised security can be assessed differently. Lenders may review location, condition, lease or owner-occupier use, valuation, loan-to-value ratio, business financials, other debts and credit conduct. A company or trust borrower may need deeds, company records and guarantor information. A private-lender exit with consistent repayments may be worth testing, but twelve months of conduct is only a possible starting point for some lender pathways, never a no-document approval.

Keep cash-out separate

Refinancing the existing balance is not the same as releasing equity. If you seek additional funds for working capital, equipment or debt consolidation, request a separate assessment of purpose, amount and conditions. More borrowing may change pricing or security, and using a long-term property loan for short-term expenses can increase total interest.

Frequently asked questions

Should I compare banks and non-bank lenders?

Yes, where suitable. Policies and documentation differ; compare actual written terms and the complete cost rather than assuming one lender type is cheaper.

What if my current lender offers a lower rate?

Compare its repricing offer with switching costs and the conditions of competing facilities. Avoiding a refinance may save fees, but the structure still matters.

Is interest-only cheaper than principal-and-interest?

It can mean lower regular payments initially, but principal remains outstanding and total interest may be higher. Compare equal time periods and remaining balances.

Can I add cash-out at the same time?

Possibly, if the lender accepts the purpose, equity, servicing and documentation. It is a separate credit consideration, not an automatic feature of refinancing.

For a closer look at switching costs, see the Good, Bad and Ugly guide in Related articles below.

This information is general and does not constitute personal financial advice. Interest rates and lending policies change regularly. Eligibility, rates and savings depend on the borrower, loan purpose, property, financial position, loan-to-value ratio, credit assessment and lender approval.

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