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2026 Rate Landscape

Commercial Property Loan Rates Australia 2026
What Business Borrowers Actually Pay

Name: Mortgagefy
Address: Sydney, NSW, AU
Telephone: +61432634648
Price range: Free

By the Mortgagefy Team · Published 2026-10-15 · Reviewed 2026-10-15

Commercial pricing is not a published rate card - it is negotiated case-by-case. Here is how pricing generally differs by doc type, LVR tier and asset class, with the drivers that move your actual rate.

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The 2026 commercial rate landscape

Commercial pricing often sits above residential, partly because of the risk-weight treatment of commercial exposures under APRA capital rules. We will not publish a specific lender's rate here because commercial pricing is negotiated per deal, and whatever we quote today will be stale by next quarter. Instead, the table below shows how pricing generally steps up by doc type and LVR. Rates, premiums and break costs vary by lender, loan and over time; ask for a written quote.

Doc type	Standard asset, 65% LVR	Standard asset, 75% LVR
Full-doc	Varies by lender	Varies by lender
Lease-doc	Varies by lender	Varies by lender
Low-doc	Varies by lender	Varies by lender
Specialist asset	Varies by lender	Varies by lender
Caveat / short-term	Varies by lender	Varies by lender

Full-doc commercial on standard retail, office or industrial with a strong tenancy or solid trading figures is generally the sharpest-priced tier for a term loan. Lease-doc or specialised asset classes can add a premium on top. Low-doc, caveat and short-term bridging sit higher again, with caveat facilities generally the most expensive. Rates, premiums and break costs vary by lender, loan and over time; ask for a written quote.

Want a repayment estimate? Run numbers through our commercial property loan calculator.

How commercial rates are set (and why they differ from residential)

Residential rates are built off a bank's advertised standard variable rate with LVR and package discounts stacked on top - mostly a published, retail process. Commercial rates work differently. The lender starts with a wholesale benchmark - typically BBSW (bank bill swap rate) for the term, or an internal 90-day cost-of-funds - and layers a credit margin on top. That credit margin is where almost all the variation lives.

The margin is set by three things. First, the risk-weighted capital charge for the asset class under APRA capital rules - commercial carries materially heavier capital than owner-occupied residential, so the bank has to recoup that in the rate. Second, the lender's view of the deal: tenant covenant, interest cover, LVR, borrower strength, loan size. Third, competitive dynamics - a lender hungry for industrial in a specific state will price sharper than one that is already overweight that asset class.

The practical consequence: there is no advertised commercial rate card to shop. Headline rate shopping on commercial produces a wide, confusing spread; two lenders can quote noticeably apart on identical paperwork. The real work is matching the deal to the lender whose capital model treats your asset class most favourably - and that is lender-by-lender knowledge, not a comparison table.

Full-doc vs lease-doc vs low-doc - the premium each tier carries

Full-doc (benchmark)

Two years of tax returns, company financials and interim figures. This is the base pricing - everything else is a premium over this. Pricing varies by lender and over time; ask for a written quote.

Lease-doc (modest premium)

The lender assesses the deal on net rental income only, with an interest cover ratio test (the required ratio varies by lender). Premium is modest because the lender still has strong collateral and tenanted cashflow. On a well-tenanted investment, you lose little by picking lease-doc and gain speed and privacy.

Low-doc (higher premium)

Accountant's declaration, BAS statements, business bank statements - no tax returns. Specialist non-bank lenders dominate this space. The premium reflects the reduced verification; sharpness returns once you can present a clean full-doc file.

Caveat / short-term (highest premium)

Bridging facilities with a clear, short-term exit. Priced above standard commercial facilities, with meaningful establishment fees. Only taken when the exit (settlement, refinance, sale) is contractually certain.

LVR tiers and pricing

LVR drives a lot of the spread. Higher LVRs generally attract higher pricing, and the step can get steeper at higher LVR tiers.

LVR tier	Typical rate shift (full-doc, standard asset)	Comment
≤50%	Below benchmark	Low gearing - often sharper pricing, sometimes with a corporate desk
51-65%	benchmark	A common sweet spot - many lenders comfortable
66-70%	Check a current quote	Still mainstream, pricing nudges
71-75%	Check a current quote	Options narrow, specialist lenders enter
76-80%	Check a current quote	Specialist / non-bank territory

Fixed vs variable commercial - how to choose

Fixed terms on commercial loans vary by lender. Longer fixes may be limited because the lender's cost of funds for longer tenor is less predictable. Pricing on fixed can sit above or below variable at any given moment depending on where the yield curve is.

If you own and occupy the premises for your trading business, a fixed term may suit - budgeting certainty while you grow revenue. If you hold the property as an investment with CPI-linked rental escalations, variable can work out cheaper over time because the escalation absorbs rate movement and you keep the option to refinance when LVR improves.

Break costs on commercial fixed loans are not standardised and can be material if rates have fallen since you fixed. Ask for a worked break-cost example on current conditions before signing a fixed facility.

The comparison rate on commercial - why it does not help much

The comparison rate was designed for residential disclosure, built on a reference loan with fixed assumptions. On commercial, those assumptions rarely match the deal. Establishment fees, line fees, valuation fees, legal fees, annual review fees - all vary widely, and some are passed through from the lender's panel partners rather than published.

The practical answer is to compare three numbers across lenders, side by side: the headline rate, the total upfront fee stack, and the total cost over the loan term (interest plus annual and ongoing fees). A lender with a lower headline rate but higher fees can still be the dearer deal over a short hold.

What drives your actual commercial rate

Asset class

Standard office, retail or industrial sits inside benchmark. Specialist use - childcare, service stations, pubs, boarding houses, caravan parks - can carry a pricing premium because collateral is less liquid.

Tenant covenant

A long lease to an ASX-listed or national-brand tenant pulls your rate down meaningfully. A short-tenure lease to a start-up tenant can push your rate up or disqualify lease-doc entirely.

Interest cover ratio

Net rental income divided by annual interest. Minimum interest cover and pricing thresholds vary by lender. If cover is thin you may need to use full-doc or reduce LVR.

LVR

Higher LVRs generally attract higher pricing, and options can narrow and shift towards non-bank lenders at higher LVRs.

Loan size

Larger loans may move to a corporate pricing desk with discretionary margin, while smaller loans may price wider because they do not justify the same relationship effort.

Borrower strength

Trading history, net asset position, other security offered - all feed the credit margin. A borrower with multiple properties and clean trading figures can negotiate a sharper rate on identical collateral.

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Frequently asked questions

What is the typical commercial property loan rate in Australia right now?

Full-doc commercial on standard retail, office or industrial with a strong tenancy or solid trading figures is generally the sharpest tier. Lease-doc, specialised assets, low-doc, caveat and short-term bridging are generally priced progressively higher. Rates, premiums and break costs vary by lender, loan and over time; actual pricing is set case-by-case, so ask for a written quote.

How are commercial rates set?

Commercial rates are built as a margin over a reference benchmark - typically BBSW or the lender's internal cost-of-funds - then adjusted for the lender's risk-weighted capital charge for that asset class, LVR and borrower profile. Unlike residential, there is no standard advertised rate card; every deal is priced individually.

Why are commercial rates higher than residential?

Three reasons. Commercial property is treated as higher risk under APRA capital rules, so banks hold more capital against the loan. Commercial collateral is less liquid - a specialist asset can take months to sell. And loan sizes are often larger and terms shorter, which concentrates risk. Expect pricing above a comparable owner-occupied home loan.

What is the rate difference between full-doc and lease-doc?

Lease-doc generally carries a modest premium over full-doc. Full-doc requires full personal and company financials and is sharpest. Lease-doc skips the personal servicing calculation and relies on net rental income passing an interest cover ratio of 1.3-1.5x. The convenience premium is modest - and worth it for investors who do not want to disclose personal income.

What drives my actual commercial rate?

Six factors: asset class, tenant quality and lease covenant, LVR, loan size, borrower strength, and current benchmark rates. The right lender for your profile matters more than headline rate shopping.

Should I take fixed or variable on commercial?

Fixed terms on commercial loans vary by lender. If you need budgeting certainty on owner-occupied premises, a fixed term may suit. For an investor on a tenanted asset with CPI-linked rental escalations, variable can work out cheaper. Break costs on commercial fixed loans can be material.

What is a comparison rate on commercial?

On commercial, the comparison rate is less reliable than residential because reference-loan assumptions do not match most deals, and establishment, line and valuation fees vary widely. Compare the headline rate, the total fee stack and the total cost over the loan term separately.

Do commercial rates vary by state?

The rate itself may not vary by state - lenders may price nationally - but valuation outcomes and lender appetite for specific asset classes vary by market. Pricing follows asset risk, not postcode.

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Published guidance is a starting point. Tell us the property type, tenancy and borrower shape - we'll come back with live pricing from the lender whose capital model fits your deal.

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Information checked October 2026. Pricing commentary on this page is general in nature and indicative only. Commercial pricing is set case-by-case and changes frequently with benchmark movements. Confirm live pricing with your chosen lender and seek professional advice before applying. Mortgagefy — Credit Representative 532656 of ACL 348324.

Commercial Property Loan Rates Australia 2026What Business Borrowers Actually Pay