Commercial Property Loan Cost Calculator
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Important: The lowest interest rate isn't always the best deal. This calculator shows the total cost of your loan including fees, not just the headline rate.
Pro Tip: A 0.5% rate difference over 20 years could cost you $20,000+ in extra interest. Always compare the total cost.
When you're buying a commercial property in Australia, the interest rate on your loan can make or break your investment. A half-percent difference might not sound like much, but over a 10-year term on a $2 million building, it could cost you tens of thousands of dollars extra. So the question isn’t just which bank has the lowest interest rate on commercial property-it’s which one gives you the best deal for your specific situation.
There’s no single ‘cheapest’ bank
You won’t find one bank that always offers the lowest rate. Rates change daily based on market conditions, your credit score, the property type, and how much you’re borrowing. Even major banks like Commonwealth Bank, Westpac, ANZ, and NAB don’t publish fixed commercial property rates online. They only give quotes after reviewing your application. Smaller lenders and non-bank financiers often undercut them-but they come with stricter conditions.For example, in late 2025, major banks were offering rates between 6.8% and 8.2% for standard commercial property loans. Meanwhile, specialist lenders like Prodigy Finance and Real Estate Capital Group were quoting as low as 6.1% for well-qualified borrowers with strong cash flow and a 30% deposit. But those lower rates came with higher fees and shorter loan terms.
What drives commercial property interest rates?
Banks don’t just look at your credit score. They care about:- Property type: Office buildings usually get better rates than retail shops or warehouses. Industrial properties with long-term tenants are seen as low-risk.
- Loan-to-value ratio (LVR): If you’re putting down 40% or more, you’ll get a better rate than someone putting down 20%.
- Tenant quality: A property leased to a national chain like Coles, Bunnings, or a government agency is far more attractive than one with a single small business tenant.
- Loan term: A 5-year fixed rate might be lower than a 10-year fixed, but you’ll pay more if you need to refinance later.
- Business financials: Banks want to see at least two years of profitable trading history. If you’re a new investor, they’ll look harder at your personal income and assets.
One client in Brisbane bought a medical centre with a 10-year lease to a GP practice. He got a rate of 6.3% because the tenant had a 99% payment history. Another investor bought a shopping strip with five small retailers-same bank, same deposit-but got 7.9% because the tenants were considered higher risk.
Who’s offering the lowest rates right now?
As of November 2025, here’s what’s happening in the market:| Lender Type | Typical Rate Range | Minimum Deposit | Max Loan Term | Best For |
|---|---|---|---|---|
| Commonwealth Bank | 7.1% - 8.0% | 25% | 25 years | Stable income, established businesses |
| Westpac | 7.0% - 7.9% | 20% | 25 years | Low-risk properties, strong cash flow |
| ANZ | 7.2% - 8.1% | 30% | 20 years | Large commercial portfolios |
| NAB | 7.3% - 8.2% | 30% | 20 years | High-value assets, corporate clients |
| Specialist Lenders (e.g., Prodigy, REC) | 6.1% - 6.9% | 20% | 15-20 years | Strong tenants, experienced investors |
Specialist lenders are often the best bet for the lowest rates-but they’re not for everyone. They require more paperwork, charge upfront fees of $3,000-$8,000, and may have balloon payments at the end of the term. If you’re not planning to refinance or sell in 5-7 years, you could get stuck with a large lump sum.
How to get the lowest rate possible
Here’s what actually works:- Shop around, don’t just go to your business bank. Your personal bank might offer convenience, but not the best rate. Use a commercial mortgage broker. They have access to 30+ lenders and know who’s currently competing for deals.
- Improve your cash flow before applying. Pay down personal debt, increase business profits, or bring in a co-investor. A stronger financial profile = lower risk = lower rate.
- Choose a property with a long-term tenant. Even a 5-year lease to a reputable company can drop your rate by 0.5-1.0%.
- Put down more than the minimum. If you can afford 40% instead of 20%, you’ll save on interest and avoid LMI (lender’s mortgage insurance), which can add 1-2% to your effective rate.
- Lock in a fixed rate if you expect rates to rise. The RBA has signaled potential hikes in 2026. A 5-year fixed might cost more now, but it protects you from future increases.
Watch out for hidden costs
The lowest headline rate isn’t always the cheapest. Some lenders:- Charge $5,000+ in application and valuation fees
- Require you to open a business account with them and maintain a $50,000 minimum balance
- Have early repayment penalties of 2-4% if you pay off the loan early
- Use variable rates that can spike after the introductory period
One investor in Sydney chose a bank offering 6.5%-but after fees, insurance, and account requirements, his effective rate was 7.8%. He switched to a specialist lender with a 6.8% rate and no hidden costs, saving $11,000 in the first year.
What if you’re a first-time investor?
If you’ve never owned commercial property before, your options are more limited. Banks will treat you like a higher risk. But you can still get good rates if you:- Have a strong personal income (over $150,000/year)
- Can prove you’ve saved for the deposit (bank statements for 3-6 months)
- Work with a broker who specializes in first-time commercial buyers
Some lenders, like Heritage Bank and Great Southern Bank, offer commercial loans to first-time investors with as little as 25% deposit-but they’ll require a guarantor (often a parent or spouse) with strong equity in their home.
Bottom line: It’s not about the bank-it’s about the deal
The bank with the lowest advertised rate isn’t necessarily the best for you. What matters is the total cost of the loan over time, the flexibility to refinance, and whether the lender understands commercial property.Start by getting three quotes: one from a major bank, one from a specialist lender, and one from a broker. Compare not just the interest rate, but the fees, terms, and conditions. A rate that’s 0.5% lower but comes with a $10,000 fee and a 15-year term might cost you more than a 7.0% loan with no hidden charges and a 25-year term.
If you’re serious about buying, don’t wait for the ‘perfect’ rate. Commercial property markets move fast. The best deal today might be gone in two weeks. Get your documents ready-financial statements, tax returns, tenant leases-and start talking to lenders now.
What is the current average interest rate for commercial property loans in Australia?
As of November 2025, the average interest rate for commercial property loans in Australia ranges from 7.0% to 8.0% for major banks. Specialist lenders offer rates as low as 6.1% for borrowers with strong financials, high deposits, and quality tenants. Rates vary based on property type, loan-to-value ratio, and tenant stability.
Can I get a commercial property loan with a 20% deposit?
Yes, but it’s harder. Most major banks require at least 25-30% deposit for commercial loans. Some specialist lenders accept 20%, but they charge higher interest rates and fees. You’ll also likely need strong business financials and a long-term tenant in place. A 20% deposit may trigger LMI or require a guarantor.
Do I need a business to get a commercial property loan?
Not necessarily. You can buy commercial property as an individual investor. But lenders will still want to see proof of income, asset strength, and the ability to service the loan. If you’re buying for investment, they’ll look at rental income projections. If you’re buying for your business, they’ll review your business financials.
Are commercial property rates higher than residential?
Yes, typically. Residential mortgage rates in Australia are around 5.5%-6.5%, while commercial rates are 6.1%-8.2%. That’s because commercial properties are seen as riskier: tenants can leave, income is less stable, and resale is harder. Lenders also require larger deposits and more documentation.
Should I fix my commercial property loan rate?
If you expect interest rates to rise in the next few years, fixing your rate is smart. Most commercial loans offer 1-5 year fixed terms. A 5-year fixed gives you certainty and protects you from rate hikes. If you plan to sell or refinance within 5 years, a variable rate might save you money. Talk to a broker to model both scenarios based on your timeline.
How long does it take to get approved for a commercial property loan?
Approval usually takes 4-8 weeks. The process includes property valuation, financial review, tenant verification, and legal checks. If you have all documents ready-tax returns, bank statements, lease agreements-you can cut that to 3-4 weeks. Delays happen when lenders need more info or the property has complex tenancy arrangements.
