Commercial Property Loan Interest Rates in Australia

Commercial property loan interest rates in Australia currently range from 6.05% to 14% depending on the lender type, your LVR, and documentation level. As at April 2026, owner-occupiers with strong financials can access rates from 6.05%, while investors and low-doc borrowers typically pay 7% to 10%. Here is how commercial loan rates work and what affects the rate you will be offered.

How commercial loan rates compare to residential

Commercial property loans carry higher interest rates than residential mortgages. Where a home loan might offer rates around 5.5% to 6.5% in April 2026, commercial loans start from 6.05% and can exceed 14% for higher-risk scenarios.

The premium exists because commercial property carries more risk for lenders. Vacancy rates are higher, rental income is less predictable, and resale markets are narrower. In 2026, CBD office vacancy rates average 12% to 14% nationally, compared to under 2% for residential. Lenders price this risk into their margins.

Current commercial loan interest rates (April 2026)

The RBA cash rate sits at 4.10% as at March 2026, after a 25 basis point increase. Commercial loan rates build on this base with margins that vary significantly by lender and borrower profile.

Within each lender category, your actual rate depends on LVR, property type, loan size, and how well you can document your income. The difference between best and worst case within the same lender can be 2% to 3%.

How LVR affects your interest rate

Loan-to-value ratio (LVR) is the single biggest driver of commercial loan pricing. A borrower at 60% LVR will pay materially less than one at 80% LVR on the same property.

Every 10% reduction in LVR typically saves 0.25% to 0.75% on your interest rate. On a $1 million loan over 15 years, a 0.5% rate difference equals approximately $45,000 in total interest. This is why your commercial property loan deposit decision directly impacts your borrowing cost.

Rates by property type

Not all commercial property attracts the same rates. Lenders assess the property's risk profile based on vacancy likelihood, tenant quality, and resale potential.

Industrial property currently attracts the most competitive rates. With national industrial vacancy below 2% in 2026, lenders view warehouses and logistics facilities as lower risk than retail or office. A well-located industrial asset may qualify for rates 0.5% lower than equivalent office space.

Owner-occupier vs investor rates

Your intended use of the property affects pricing. Owner-occupiers who will operate their business from the premises generally access better rates than pure investors.

Owner-occupiers demonstrate alignment between their business success and the property's performance. If the property houses your business, you have strong incentive to maintain repayments. Lenders typically offer 0.25% to 0.5% better rates for genuine owner-occupiers.

Investors face stricter assessment because rental income depends on tenants. Lenders factor in potential vacancy periods and the risk that rental income may not cover repayments during vacancies.

Full doc vs low doc rates

The documentation you can provide significantly impacts your interest rate. Full documentation loans verify your income thoroughly and receive better pricing. Low doc options suit self-employed borrowers who cannot provide traditional paperwork but carry a rate premium.

A full-doc borrower at 65% LVR might access 7% from a major bank. The same borrower with low-doc requirements might pay 8.5% from a non-bank lender. Over a 10-year term on $800,000, that 1.5% difference equals approximately $140,000 in additional interest.

How loan size affects rates

Larger commercial property loans often attract better rates due to economies of scale. Lenders spread their fixed costs across a larger principal, and the competitive tension for larger deals can drive margins down.

However, loan size alone does not guarantee better rates. A $5 million loan at 80% LVR on a specialised property will still attract premium pricing despite the size.

Fixed vs variable commercial rates

Commercial loans are available with fixed and variable rate structures. Each has trade-offs depending on your view of interest rate movements and need for certainty.

Variable rates track the lender's base rate, which moves with the RBA cash rate and wholesale funding costs. In April 2026, variable commercial rates range from 6.05% to 12% depending on the factors above. Variable rates suit borrowers who want flexibility to make extra repayments or refinance without break costs.

Fixed rates lock in a rate for 1 to 5 years. Current fixed rates for commercial property range from 6.5% to 9% for 1 to 3 year terms, with 5-year fixed rates around 7% to 10%. Fixed rates suit borrowers who want payment certainty or believe rates will rise.

Commercial fixed rates carry break costs if you exit early. These can be substantial, particularly if rates have fallen since you fixed. Always calculate potential break costs before fixing.

How to get the lowest rate

Several strategies can help you secure better commercial loan pricing.

Increase your deposit

Every step down in LVR improves your rate. Moving from 75% LVR to 65% LVR might save 0.5% or more on your rate. If you have equity in other property, consider using it to reduce the LVR on your commercial purchase.

Provide full documentation

If you can supply two years of tax returns and clean financials, you will access better rates than low-doc alternatives. Even if your income is complex, work with your accountant to present it in the clearest possible way.

Choose standard property

Metro office, industrial, and mainstream retail attract better rates than specialised assets. If you are choosing between two properties, the one with broader market appeal may offer better financing terms.

Compare across lender types

Major banks offer the lowest rates but have the strictest criteria. Second-tier banks and credit unions may offer competitive rates with more flexibility. Non-bank lenders charge more but approve deals that banks decline. A broker can identify which lenders are pricing most competitively for your specific situation.

Consider loan size and term

Larger loans and shorter terms sometimes attract better pricing. If you can increase your loan slightly to hit a pricing tier, or accept a shorter term with higher repayments, you may save on the overall rate.

What lenders assess beyond rate

Interest rate is not the only cost of a commercial loan. Lenders also charge establishment fees (0.5% to 2% of loan amount), ongoing fees ($10 to $50 per month), valuation fees ($2,000 to $5,000+), and exit fees on some products. A loan with a lower rate but higher fees may cost more overall.

Always compare the total cost of the loan, including all fees, rather than focusing on rate alone. Ask for a comparison rate or calculate the effective annual cost yourself.

This article is general information only and is not financial advice.