Most Melbourne business owners set their commercial property loan and move on. If your rate hasn’t been reviewed in the past 18 months, the spread between what you’re paying and what the market is offering right now is likely material — sometimes by 1% to 2% or more. On a $1.5 million commercial mortgage, that difference is $15,000–$30,000 per year in avoidable interest.

I spent over a decade in business banking at NAB before co-founding IFG, and commercial property refinancing is one of the most consistent conversations I have with Melbourne business owners who have been with the same lender for three or more years. This guide explains how the market sits in mid-2026, how a commercial property refinance is assessed differently from a residential one, what LVR you can realistically achieve by property type, and what Victoria’s Commercial and Industrial Property Tax (CIPT) means for your refinancing timeline.

Why are Melbourne business owners refinancing commercial property loans right now?

Three forces are driving commercial property refinancing activity in 2026. First, the spread between bank and non-bank commercial rates has widened significantly over the past two years — specialist commercial funders are competing aggressively for owner-occupier business at rates the major banks have been slow to match. Second, commercial property values across Melbourne’s industrial and suburban fringe have held well, meaning many business owners who bought or last refinanced at 65–70% LVR have seen their equity position improve — and an improved LVR translates directly to better pricing from a new lender. Third, many businesses that borrowed during 2021–22 on three- or five-year fixed commercial terms are now rolling off those terms onto revert rates that were set in a very different lending environment.

The commercial loyalty tax is real. Major banks price commercial property loans on a relationship basis — meaning existing borrowers rarely receive the rate offered to a new client presenting the same security. A broker review regularly finds discrepancies of 0.5%–1.5% p.a. on secured commercial facilities. On a $1.2 million loan, 1% over five years is $60,000 in avoidable interest. That comparison costs nothing to run.

The process of refinancing a commercial property loan — replacing an existing facility with a new one at better terms — is more involved than refinancing a home loan, but not materially more difficult when approached correctly. The key difference is that a new lender requires an independent valuation of the commercial property, a review of the business’s financials, and in investment cases, analysis of the tenancy structure. Getting that process right is where a broker with a commercial banking background earns their place. For a full overview of the structures available when buying commercial property as a Melbourne business owner — including LVR structures and the owner-occupier advantage — see IFG’s small business commercial property guide.

How is a commercial property refinance assessed differently from a residential one?

If you’ve refinanced a home loan before, commercial property refinancing will feel more intensive. Where a residential lender primarily asks “can this borrower service the debt?”, a commercial lender’s assessment is broader. The key differences:

  • Business financials, not just personal income. For owner-occupier commercial property — where your business occupies the premises — the lender assesses the business’s ability to service the debt, not the director’s personal income in isolation. Two years of business financials (or in some cases one year plus management accounts) is standard. The business must demonstrate consistent revenue and adequate profit to meet repayments with a serviceable buffer.
  • Property type and use. Lenders assess commercial property by category: industrial, office, retail/strip retail, mixed-use, and specialised (childcare, petrol stations, hospitality). Each category carries its own LVR ceiling and lender appetite. Industrial has the highest lender appetite in Melbourne right now; retail and hospitality are more restricted.
  • Tenancy and WALE (for investment properties). If the property is tenanted rather than owner-occupied, lenders analyse the Weighted Average Lease Expiry — the average remaining lease term across all tenants, weighted by their rental contribution. A Melbourne industrial investment with a WALE of 5+ years and a strong national tenant will be assessed very differently from a retail strip with multiple leases expiring within 12 months.
  • Independent valuation. Every commercial property refinance requires a full valuation from an approved commercial valuer. Unlike residential automated valuation models, commercial valuations take 1–3 weeks and cost $1,500–$5,000 depending on property size and complexity. This is usually the longest part of the timeline.

A directors’ guarantee will be required on almost every commercial property loan — whether the refinance is through a bank or non-bank lender. Understand what that obligation means before signing. For businesses carrying ATO debt at the time of refinancing, lenders will want a clear position on how that liability is being managed — the sequencing of how ATO debt is addressed can directly affect the refinancing timeline.

What LVR can I achieve when refinancing — and does property type matter?

Property type is one of the most important variables in commercial property refinancing. Unlike residential lending where LVR is largely standardised, commercial lending varies significantly by property category, tenant quality, and whether you are an owner-occupier or investor.

Property Type Standard LVR (Investor) Standard LVR (Owner-Occupier) 2026 Indicative Rate Range
Industrial (warehouse / factory) Up to 65–70% Up to 70–75% 6.2%–8.5% p.a.
Office Up to 60–65% Up to 65–70% 6.5%–8.8% p.a.
Retail / Strip Retail Up to 55–65% Up to 65% 6.8%–9.5% p.a.
Mixed-Use (commercial + residential) Up to 60–65% Up to 65% 6.5%–9.0% p.a.
Specialised (childcare, hospitality) Up to 55–60% Lender-dependent 7.5%–10.5%+ p.a.

Owner-occupier consistently achieves a higher LVR and better rate than investment — typically 0.3%–0.75% lower on rate and 5%–10% higher on the LVR ceiling. If your business occupies at least 51% of the floor space, you qualify as owner-occupier under most lenders’ criteria, and that is the strongest refinancing position available. These figures are indicative for a well-documented, established business with a clean credit history. Non-bank lenders can sometimes achieve higher LVR in specific circumstances — particularly for industrial property held by a business with strong financials. Use IFG’s finance calculators to model repayment scenarios before speaking with us, then confirm the result with a director.

What does Victoria’s Commercial and Industrial Property Tax mean for my refinancing decision?

Victoria’s Commercial and Industrial Property Tax — phased in from 1 July 2024 — is something Melbourne business owners should understand when making any commercial property finance decision, even if its direct impact on refinancing is limited.

Under the CIPT framework, commercial and industrial properties acquired from 1 July 2024 are no longer subject to stamp duty on purchase. Instead, an annual tax of 1% of the property’s site value applies from the 10th year of ownership. For businesses refinancing properties acquired before the CIPT start date, stamp duty applied on the original purchase — and there is no CIPT obligation unless the property transacts again.

CIPT and refinancing in plain terms: If you purchased a Melbourne commercial property before 1 July 2024, refinancing does not trigger CIPT — the property remains a stamp-duty-paid asset and the annual tax does not apply. If you are considering selling and buying a new commercial property, CIPT replaces stamp duty on the new purchase, potentially improving your settlement cash position while adding an annual site-value obligation from year 10. Your accountant should model the long-term CIPT position alongside any property transaction. This is not tax advice — speak with your accountant for your specific situation. The State Revenue Office of Victoria maintains full CIPT rate and exemption guidance.

The practical relevance for refinancing: CIPT does not affect the mechanics or cost of refinancing an existing commercial property facility. It does affect decisions about whether to stay in an existing property versus transacting into a new one — and understanding the framework matters before any property or finance decision in Victoria in 2026.

When does refinancing a commercial property loan actually save money?

The answer is not just about rate — it is about the total cost of credit over the period you intend to hold the facility. A refinance involves upfront costs: discharge fees from your existing lender ($500–$1,500 typically), a new independent valuation ($1,500–$5,000), application and establishment fees with the new lender (sometimes waived on competitive deals), and government mortgage registration fees. The question is whether the saving on ongoing interest outweighs those upfront costs, and how quickly.

A concrete Melbourne example:

  • Existing loan: $1.2M at 8.2% p.a. (interest-only) = $98,400 per year in interest
  • Refinanced loan: $1.2M at 6.9% p.a. (interest-only) = $82,800 per year in interest
  • Annual saving: $15,600
  • Estimated upfront cost: $8,000–$12,000 all-in
  • Break-even point: under 9 months

In this scenario, refinancing makes clear financial sense. Where it becomes more complex is when the existing loan carries a significant break cost — common on fixed-rate commercial facilities — or when the property value has moved such that the LVR is now too high for the preferred lender tier. A pre-application broker review identifies these constraints before any formal process begins, so the net position is clear before committing to valuation fees.

How IFG approaches commercial property refinancing for Melbourne businesses

Frank Marin and I have been arranging commercial property finance for Melbourne businesses since 2003, coming from NAB’s commercial banking team where these credit decisions were made daily. The approach we bring is different from a residential broker who occasionally handles a commercial file: we understand property type assessment, WALE analysis, tenant covenant strength, and the specific documentation commercial lenders require — because we used to be on the other side of those decisions.

What IFG does at the start of every commercial refinancing review:

  • Rate and structure benchmark. We compare your existing rate and structure against the current market across a deliberately broad panel of bank, non-bank and specialist lenders. Many businesses are surprised by the gap between what their bank has them on and what the same property and business profile could achieve today.
  • Property assessment before application. We assess property type, location, tenancy position and likely LVR with the preferred lender before any formal application — preventing wasted valuation costs on a deal that will not proceed at the terms required.
  • Serviceability modelling. Commercial lenders assess debt serviceability differently across their credit tiers. We model the business’s financials against each lender’s specific assessment framework so the application goes to the lender most likely to approve at the best terms, not simply the business’s existing bank by default.
  • Same business day response — by a director. Every commercial property refinancing enquiry to IFG is handled by Brian or Frank directly. Not a junior broker, not an automated pre-qualification process.

For businesses holding commercial property within an SMSF — where the commercial LRBA structure is unaffected by the 1 July 2027 residential ban — see IFG’s SMSF lending page for how commercial property within super is arranged. For businesses with more complex structures involving development finance or private lending, IFG’s commercial lending page and business finance broker page outline the full range of commercial structures we arrange. The IFG commercial property finance page covers the full service for Melbourne business owners.

Ready to review your commercial property loan?

IFG’s directors have been arranging commercial property finance for Melbourne businesses since 2003 — formerly from NAB’s commercial banking team. We benchmark your existing rate, assess your property position, and identify whether a refinance stacks up before any application is submitted.

Talk to a director today

Or call 0401 333 636 (Brian) — same business day response, by a director.

How long does refinancing a commercial property loan take in Australia?
A standard commercial property refinance takes 4–8 weeks from initial enquiry to settlement. The variable is usually the independent valuation — commercial valuations take 1–3 weeks depending on property type and valuer workload. Pre-application preparation (gathering financial documents and confirming property details) can reduce the overall timeline materially. IFG submits applications only when documentation is complete and the deal is properly packaged, reducing the risk of lender-imposed conditions or delays mid-process.
Can I release equity when I refinance a commercial property loan?
Yes — if your property has increased in value since you last borrowed, equity release is available as part of a refinance. The maximum accessible equity is determined by the new lender’s LVR policy for your property type (see the table above). A fresh independent valuation is required to establish the current value, and the cash-out must be declared with a clear purpose — working capital, business reinvestment, or another commercial property purchase. Equity release above the standard LVR ceiling typically requires a specialist or non-bank lender assessment.
Does my business need to be profitable to refinance a commercial property loan?
Not necessarily profitable by every accounting measure, but the business must demonstrate a consistent revenue base and a documented ability to service the new loan repayments. Lenders assess the last 1–2 years of financials. Businesses with strong revenue but lower net profit due to director drawings, depreciation or legitimate add-backs often need a specialist lender or a carefully packaged application. A broker who understands how commercial lenders assess add-backs can make the difference between an approval and a decline on the same set of financials.
What is WALE and why do commercial lenders use it?
WALE stands for Weighted Average Lease Expiry — the average remaining lease term across all tenants in a commercial investment property, weighted by their rental contribution. Lenders care because a property with short WALE carries significant income risk: if tenants don’t renew, the security income disappears. A Melbourne industrial property with a single strong tenant on a seven-year lease has a WALE of 7 years and is highly bankable at competitive rates. The same building with monthly tenancies has effectively zero WALE and will attract a materially more conservative LVR and higher rate.

General information only — not financial, tax or legal advice. Commercial property finance structures, tax treatment and eligibility should be discussed with a licensed finance broker and your accountant, who can assess your specific circumstances. Always speak with your accountant before making decisions with tax or accounting implications.