Financing Commercial Property: What Buyers Need to Know

Christian Stevens, Mortgage Broker

Published January 31, 2025, 2:10 p.m ET

Buying commercial property — whether it’s an office, warehouse, retail space, or industrial unit — opens a world of investment opportunities beyond residential real estate.

But commercial property finance works very differently to home loans. Here’s what every Australian buyer needs to understand before diving in.

Share:

🔑 Key Facts

How Commercial Property Loans Differ from Home Loans

Key differences include:

  • Loan-to-Value Ratio (LVR): Most lenders require a larger deposit (typically 30–40%).
  • Interest Rates: Generally higher than standard home loans.
  • Loan Terms: Shorter loan terms (often 15–25 years instead of 30 years).
  • Assessment Focus: Based more on the property’s lease income than personal income.
  • Fees: Higher setup costs, valuation fees, and legal fees.

What Lenders Look For

When assessing a commercial property loan, lenders consider:

  • The type of property and its location
  • The quality and term of any leases in place (“tenant strength”)
  • Borrower’s financial position, assets, and business experience
  • Property’s potential for ongoing rental yield and capital growth

Tip: Longer, stable leases (“blue chip tenants”) significantly strengthen your application.

Types of Commercial Properties You Can Finance

Common options include:

  • Retail shops
  • Offices
  • Warehouses and industrial units
  • Medical suites
  • Strata commercial units
  • Mixed-use buildings

Each type has different lending policy implications, rental expectations, and risks.

Smart Strategies for Commercial Property Buyers

To improve your success chances:

  • Save a larger deposit (30%+ preferred)
  • Choose strong locations with high tenant demand
  • Understand tenant lease structures (net vs gross leases)
  • Budget for outgoings (maintenance, rates, insurance)
  • Work with brokers experienced in commercial lending

📞 Ready to Finance Your Commercial Property with Confidence?

Flint’s expert brokers:

Recommended Articles

Monthly Newsletter

Subscribe and be the first to know about what’s happening in the market.

Contact Us Today

Learn more about how we can help you achieve your financial goals.

    Don’t worry, there’s no commitment. Strategic guidance guaranteed.

    CONTACT FORM

    CONTACT FORM

    CONTACT FORM

    CONTACT FORM

    CONTACT FORM

    BUYER/FINANCE GUIDE FORM

    CONTACT FORM