Commercial Loan Interest Rates In Australia

Commercial loan rates depend on the property, borrower and loan structure.

Home Loan Experts currently publishes starting rates from 6.29% | 6.89% (comparison rate) three years fixed for eligible commercial loans secured by residential property.

Variable rates for eligible loans secured by commercial property start from 6.64% | 7.24% (comparison rate)

Higher LVRs, specialised properties, weaker leases, limited financial evidence, credit issues and urgent settlements usually lead to higher pricing or fewer lender options.

Current commercial loan interest and comparison rates

These are starting rates for applications that meet the lender’s criteria. They are not guaranteed quotes or market averages. Rates, fees and lending policies change, so we confirm current pricing before you apply.

Commercial loans secured by residential property

These rates apply to eligible business-purpose or commercial loans secured by acceptable residential property.

Lenders often price this structure differently from a loan secured only by commercial property. Your residential property also secures the business debt. You need to weigh the potential rate benefit against the risk of using your home as security.

Commercial loans secured by commercial property

SMSF Commercial Loans

SMSF applications also need an acceptable borrowing structure, suitable property and enough liquidity. Related-party transactions need legal, tax and superannuation advice.

Low-Doc Commercial Loans

A low-doc commercial loan uses alternative income evidence when full financial statements are unavailable. Each lender accepts different evidence.

Lenders assess a lease-doc loan mainly on the property’s net rental income, lease terms, tenant quality, LVR and interest cover.

Lease Doc Commercial Loan

Lease doc commercial loans allow you to use the rental income of the security property as evidence that you can afford the debt. This is similar to a low doc loan.

How Do Commercial Loan Rates Work?

Starting rates

A starting rate is the lowest advertised rate for a defined lending scenario. It is not the rate every borrower receives.

A higher LVR, specialised property, short lease, weak tenant, limited financial evidence, adverse credit or urgent settlement changes the pricing and the lenders available.

Comparison rates

A comparison rate combines the interest rate with selected fees used in the calculation. It helps expose a low headline rate supported by higher included fees.

The figure does not cover every cost. Common exclusions include:

• Government charges
• Transaction-specific legal costs
• Some valuation costs
• Review and revaluation fees
• Fixed-rate break costs
• Early-repayment and discharge costs
• Fees triggered by specific events

Check the assumed loan amount, term, repayment structure and included fees before comparing products.

Reference rate plus customer margin

Some commercial loans use a lender reference rate, BBSW or BBSY, plus a customer margin.

All-in interest rate = reference rate + customer margin

For example, a 4.90% reference rate plus a 2.00% customer margin gives an all-in rate of 6.90% p.a. before fees.

The reference rate moves with funding markets. The customer margin reflects the lender’s assessment of the borrower, property and loan structure.

Current cash-rate context

The RBA cash-rate target is 4.35%, effective 12 August 2026. Lenders build their commercial rate by adding funding costs, operating costs and a risk margin.

BBSY Loans

What is a bank bill loan?

BBSY loans are funded using the bank’s cost of funds as a reference rate. This is the Bank Bill Swap rate (BBSW) plus 0.05%. The bank then adds a customer margin for the risk of your loan so they make a profit.

When the 30, 90 or 180-day term comes to an end, your loan is rolled over at the new BBSY interest rate for that term plus your customer margin. In effect, this is a variable rate loan where the interest rate changes every few months.

This type of loan is typically available for loan sizes over $2,000,000 but it is more common for loans over $5,000,000 as it is often lower than a standard business loan.

How is the customer margin calculated?

Your customer margin is calculated based on the overall risk of your application.

This includes your security, ability to pay the loan, equity position and anything else that is a risk to a bank. The higher the risk, the higher your margin. We’ve assumed you have a low risk loan in the above quoted interest rates.

Each bank may calculate your customer margin in a different way! This is where we can help to negotiate the lowest possible interest rate.

Please call us on 1300 889 743 or enquire online and one of our commercial mortgage brokers will get back to you with some options.

What affects your commercial loan rate?

Lenders price the full deal. A strong business does not cancel out a high LVR, weak lease or hard-to-sell property.

• Lower LVRs and more equity usually improve pricing. A valuation shortfall raises the LVR and often narrows lender choice.
• Standard, marketable properties in established locations attract more lenders. Specialised use, remote locations, unusual zoning and limited resale demand narrow the field.
• Lenders price a tenanted property loan using net rent, lease length, tenant strength and vacancy risk. A vacant property needs a clear servicing and exit plan.
• Current financial statements and consistent cash flow give the lender a clearer view of serviceability. Missing or inconsistent figures increase uncertainty.
• Clean repayment conduct and managed tax obligations support a stronger application. Arrears, defaults, dishonours and unresolved tax debt restrict the lender list.
• Short facility terms, large balloon payments and complex ownership structures increase refinancing and repayment risk.
• Lender appetite matters. A lender that regularly funds the property type and borrower profile often prices the loan better than a lender treating it as an exception.

Lenders also review the loan amount, repayment type, interest-only period, business trading history and whether the property is owner-occupied or leased to another business.

When a lower commercial loan rate costs more

A lower headline rate does not guarantee a lower total cost.

Commercial loan fees often include:

• Establishment or application fees
• Valuation fees
• Lender legal and documentation costs
• Annual or line fees
• Review and revaluation costs
• Fixed-rate break costs
• Discharge and refinancing costs

Consider two sample offers for a $1 million interest-only loan.

Offer A has the lower rate, yet Offer B costs about $7,500 less in the first year under these assumptions.

Offer A saves $2,500 a year in interest but costs $10,000 more upfront. It takes about four years to recover the extra upfront cost if the balance and rates stay unchanged.

The result changes when the balance reduces, rates move or ongoing, review and exit costs differ. The example also excludes tax effects.

How to compare commercial loan offers

Compare every offer using the same loan amount, property value, LVR, repayment type and expected holding period.

• Check whether the quoted rate is a starting rate, indicator rate, fixed rate or negotiated all-in rate.
• Add the fees payable upfront, each year, at review and at exit.
• Confirm the facility maturity date and any renewal requirements.
• Check whether repayments are principal-and-interest or interest-only, and when that arrangement ends.
• Review the security, personal guarantees, covenants and annual reporting requirements.
• Check the break, legal, discharge and refinancing costs before choosing a shorter fixed term or facility term.

Do not compare one lender’s base or indicator rate with another lender’s all-in rate. The figures measure different things.

How much is repayment for a $1 million commercial property loan?

The examples below use a $1 million loan. The principal-and-interest figures assume a 20-year repayment schedule.

Moving from 6.74% to 7.74% raises the interest-only cost by about $833 a month. The principal-and-interest repayment rises by about $606 a month. On a constant $1 million balance, the annual interest bill rises by $10,000.

These examples exclude fees. They assume monthly repayments and a constant rate. Commercial facilities use different terms, repayment frequencies, interest-only periods and balloon structures.

What we need to price your commercial loan

A property price and loan amount are not enough for a useful commercial rate estimate.

Send us:

• Property address, type and intended use
• Purchase price or estimated value
• Required loan amount and purpose
• Available cash deposit or usable equity
• Owner-occupied, investment or mixed-use status
• Lease, tenant, remaining lease term and net rent
• Business structure, trading history and financial statements or alternative income evidence
• Existing business and personal debts
• Known credit or tax issues
• Preferred repayment structure
• Required settlement or refinancing date

We use this information to identify suitable lenders before comparing rates.

Ask Home Loan Experts to price your commercial loan

Published rates do not show whether a lender accepts your property, lease, financial evidence, credit position or settlement date.

Send us the scenario. We will identify lenders that accept the loan, then compare the rate, comparison rate, fees, facility term and conditions.

We currently assess commercial property loans with:

• A minimum loan amount of $500,000
• A minimum deposit of 30%

Request a commercial loan assessment. Call us on 1300 889 743 or enquire online and one of our commercial mortgage brokers will get back to you with some options.