Commercial Property Loan Refinance Sydney: The Good, the Bad and the Ugly

By Matthew Stack, Commercial Finance and Mortgage Broker
Updated 9 September 2026

If you own a warehouse, factory, office, shop or other commercial property in Sydney, an unsuitable commercial loan could be costing your business thousands of dollars each year.

Commercial property owners often review wages, suppliers and operating expenses while leaving one of their largest costs—their commercial property finance—untouched.

Refinancing may provide a lower interest rate, improved cash flow, a longer loan term, simpler repayments or access to property equity. However, the lowest advertised rate is not always the best overall deal.

This guide explains the good, the bad and the ugly of commercial property loan refinancing for business owners and investors in Milperra, Revesby, Padstow, Panania, East Hills, Bankstown and across Sydney.

Quick answer: is commercial refinancing worthwhile?

Commercial property refinancing may be worthwhile when the expected interest savings and improved loan structure outweigh the valuation, establishment, legal and discharge costs.

Before refinancing, compare:

• Interest rate

• Monthly repayments

• Total interest over the proposed term

• Establishment and risk fees

• Valuation and legal expenses

• Annual reviews and ongoing charges

• Fixed-rate break or discharge costs

• Loan flexibility

• Documentation requirements

The correct comparison is the total cost and suitability of the new facility—not just its headline interest rate.

The good: a lower rate can produce substantial savings

Even a small rate reduction can make a large difference on a commercial property loan.

For example, reducing the rate on a $2 million loan by two percentage points represents an indicative starting interest difference of approximately $40,000 per year.

Similarly, a one-percentage-point reduction on a $1 million balance represents approximately $10,000 per year.

These are simplified illustrations based on the starting balance. Actual savings depend on the approved rates, fees, repayment structure, loan term and changing balance.

A lower interest cost may also improve business cash flow and, in some cases, the way lenders assess your capacity to service additional debt.

The good: you may have different documentation options

Business owners sometimes assume that every commercial refinance requires two complete years of financial statements and tax returns.

That is not always the case.

Depending on the lender, borrower and property, commercial finance may be assessed through:

• Full-document lending

• Alternative-documentation lending

• Low-documentation lending

• Lease-document lending

Alternative verification can include business activity statements, bank statements, accountant declarations, rental income or loan conduct. The acceptable evidence varies considerably between lenders.

For example, CommBank currently describes a Lease Doc option for eligible tenanted commercial investment properties. It assesses servicing using rental income and can be used for purchasing, refinancing or releasing equity. Specific requirements apply, including ownership, lease, interest-coverage and loan-to-value conditions. See CommBank’s current Lease Doc criteria.

The lesson is simple: do not assume you are unable to refinance solely because your latest financial statements are not ready.

The good: moving away from private or non-bank finance

A private or non-bank commercial loan may have been the right solution when you needed fast funding, had incomplete financials or could not satisfy a major bank’s policy.

That does not mean you must remain with the same lender permanently.

After a period of satisfactory repayments, your position may have improved because:

• Your business earnings are stronger

• Your financial statements are now available

• The property has increased in value

• Your loan balance has decreased

• Your loan-to-value ratio has improved

• You have demonstrated clean repayment conduct

Depending on your circumstances, a possible pathway could be:

Private lender → non-bank lender → bank

Some borrowers may be able to move directly from private finance to a mainstream lender. Approval will depend on the property, income evidence, loan purpose, credit history, loan conduct and lender policy.

The good: consolidating eligible business debt

A business may have several facilities running at the same time:

• Commercial property finance

• Equipment finance

• Vehicle finance

• Business loans

• Working-capital facilities

• Other business debts

In some circumstances, eligible business debts can be consolidated against commercial property.

This can simplify repayments and potentially reduce the immediate cost of borrowing. It may also improve monthly cash flow.

However, debt consolidation needs to be assessed carefully.

The bad: lower repayments can mean more total interest

Moving short-term equipment or business debt into a 20- or 30-year commercial property facility may reduce the monthly repayment.

But extending the debt over a much longer term could increase the total interest paid.

Before consolidating, compare:

• The existing debt’s remaining term

• The proposed new term

• Interest saved each month

• Total projected interest

• Refinancing costs

• Whether additional repayments are allowed

• The planned date for repaying the consolidated portion

A smaller monthly repayment does not automatically mean a less expensive loan.

The bad: commercial risk and establishment fees

Commercial lenders may charge costs that residential borrowers are less familiar with, including:

• Risk fees

• Establishment fees

• Application fees

• Legal costs

• Settlement charges

• Annual review fees

• Ongoing facility fees

A risk fee equal to 0.50% of a $2 million loan would be $10,000.

A loan with a slightly lower interest rate could therefore be more expensive initially if it comes with substantial upfront costs.

Ask for a full comparison of the new interest rate, fees, loan term and likely break-even period.

The bad: commercial valuation costs

Commercial property valuations can be considerably more expensive than residential valuations.

The cost depends on the property, location, complexity and lender. Some lenders may cover, reduce or waive the valuation expense for an eligible transaction, while others pass the full cost to the borrower.

This cost should be established before proceeding whenever possible.

The ugly: leaving your commercial loan on autopilot

A commercial loan that was suitable several years ago may no longer suit your business.

Since settlement:

• Your lender’s pricing may have changed

• Other lenders may have entered the market

• Your property may have increased in value

• Your business performance may have improved

• Your loan-to-value ratio may have decreased

• Different documentation pathways may have become available

• Your future business plans may have changed

Leaving a large commercial property loan unreviewed for years can be expensive.

A regular review does not mean you must refinance. It allows you to determine whether retaining, repricing or replacing the existing loan provides the best outcome.

Could refinancing improve borrowing capacity?

Potentially.

Commercial lenders assess both the value of the security and the borrower’s ability to service the debt. A lower interest cost or better repayment structure may improve the servicing position under some lender models.

That could assist a business seeking to:

• Purchase another commercial property

• Release equity

• Expand its operations

• Consolidate eligible debts

• Improve working capital

• Restructure existing finance

The result will depend on the lender’s assessment and should not be assumed before approval.

How does commercial property refinancing work?

A commercial refinance review generally considers six questions.

1. How much do you owe?

Confirm the current balance, available limit and any other secured debts.

2. What is the property worth?

The estimated value determines the approximate loan-to-value ratio. A formal lender valuation may be required.

3. What are you currently paying?

Review the interest rate, repayments, annual fees and loan structure.

4. How has the loan performed?

Lenders commonly examine recent loan statements and repayment conduct.

5. How will income be demonstrated?

This determines whether Full Doc, Alt Doc, Low Doc or Lease Doc assessment may be suitable.

6. What do you want the refinance to achieve?

The objective could be a lower rate, improved cash flow, debt consolidation, equity release, a longer term or a move away from private finance.

Commercial property refinancing in South West Sydney

I am Matthew Stack from Fetch My Home Loan, a finance and mortgage broker based in Milperra.

I assist commercial property owners and businesses across:

• Milperra

• Revesby

• Padstow

• Panania

• East Hills

• Bankstown

• Wetherill Park

• Canterbury-Bankstown

• South West Sydney

• Greater Sydney

This includes finance secured by warehouses, factories, industrial units, offices, shops, mixed-use buildings, owner-occupied premises and commercial investment property.

Frequently asked questions

What are current commercial property loan rates?

Commercial property loan rates vary according to the lender, property, loan amount, loan-to-value ratio, purpose, borrower and documentation provided. Rates also change regularly, so a current individual comparison is required.

Can I refinance a commercial property loan without two years of financials?

Possibly. Some lenders offer Alt Doc, Low Doc or Lease Doc assessment using alternative income evidence. Eligibility and acceptable documents vary between lenders.

Can I refinance a warehouse or factory loan?

Yes. Warehouses, factories and industrial units are commonly used as security for commercial finance, subject to valuation and lender approval.

Can a company or trust refinance commercial property?

Yes. The lender will assess the borrowing entity, guarantors, trust or company documents, income, property and proposed loan purpose.

Can business debts be consolidated into a commercial property loan?

Eligible business debts may sometimes be consolidated against commercial property. The longer-term interest cost, security risk and refinancing fees should be considered carefully.

Is commercial refinancing worthwhile if my rate falls by only 1%?

It may be. A one-percentage-point difference on a large balance can produce meaningful savings, but the benefit must be compared with all refinancing fees and the proposed loan term.

How long does a commercial refinance take?

Timing varies with the lender, valuation, property, documentation and complexity. A straightforward application may take several weeks, while complex transactions can take longer.

Do I need a new commercial property valuation?

Usually, the proposed lender will require a valuation. Whether the borrower pays for it depends on the lender and transaction.

Request a commercial loan review

If you have a commercial property loan, start with four numbers:

1. Current loan balance

2. Current interest rate

3. Estimated property value

4. Monthly repayment

From there, I can assess whether retaining, repricing or refinancing the facility may provide a better outcome.

Matthew Stack
Commercial Finance and Mortgage Broker
Fetch My Home Loan
Phone: 0423 237 242
Email: matthew@fetchmyhomeloan.com.au
Website: fetchmyhomeloan.com.au

This article provides general information only and does not consider your objectives, financial position or needs. Commercial finance is subject to lender policy, valuation, servicing, loan-to-value requirements, credit assessment and approval. Rates, fees and policies can change. A lower rate does not necessarily produce a lower overall borrowing cost.