Interest Rates on Commercial Property

Hi PC,

long time reader, first time poster.

Can anyone guide me to a good information source on interest rates for different commercial property types?

what would you consider to be an average or standard interest rate in 2021?

thanks!

 

I'm paying 2.59% fixed 3 years io in a trust.

 

Wow that’s significantly lower than was indicated to me via a broker. Who is this with and any idea on a standard variable rate?

 

Someone I know quite well is looking to secure a commercial rate of 3.27% 5 Year P&I on $6.5m

Interested to see what others are achieving.

 

I got this quoted at the earlier stages of the pandemic when everything was in melt down so it may have been an overreaction by ANZ?

 

3.25% P/I for 15 years around $2m 70% LVR (company name)

Not sure if its easy to negotiate commercial for rate reset like it is for resi ?

 

2.91% variable for 10 yrs P&I taken out 12 months ago. LVR 40%.
under 1m but loans were much higher when customer margin was set a few years back.
Dont enjoy the need for regular valuations every few years though with commercial.

 

Ive seen a few rates floating in the low 2's, p&i with 3 year terms. Lvr ranges between 60-70% depending on the relationship with the client.

 

just got a quote via a broker for a re-finance.
From CBA, $1.3m, 60% LVR @ 2.5% interest only. (that's better than my home resi rate!!!)

Showed the quote to NAB for another existing commercial loan - pushed them to match it - and they will.

Some good rates on commercial loans at present.
Best ever?

 

more interesting and worth sharing is;
CBA is calculating loan serviceability to a rate of 5.5% (the bank buffer for risk management i presume)

 

It all depends. for example if you own your own business and are buying a premises for your own business the LVR can be very high and the rates very attractive from a major bank.

Just recently i had a conversation with one of the major banks and i couldn't believe the LVR nor the rate being so good.

If you're doing it as an investor, the LVRs are lower and rates higher.

The opther option is if you are a business owner, is to use the SMSF to acquire the commercial property. We actually do a lot of work in this area and it has a few benefits.
1. The SMSF commercial asset is ring fenced from other creditors to the business. Meaning if things were to go bad, the asset is protected in the SMSF, providing they haven't defaulted on the loan to the lender for the commercial asset.
2. The business then pays a market rate rent to the SMSF, which is taxed at the SMSF rate and not the standard company tax rate.
3. There are long term benefits to holding an SMSF with asset in the vehicle and future tax rates.

 

Sorry for my newbie question, so does that means commercial property is better to be registered under company or trust rather than personal name to get a better rate and LVR?
I read somewhere that when you have commercial property under personal name, lender are not that willing to touch it.
Please correct me.

 

I’m getting 70% loans at 2.95% on 25 year terms.
I got these through Suncorp about 6 months ago.

I also looked into the ANZ 80% loan but they only lend that LVR up to $1m in debt

 

You should speak to your accountant about the best tax structures for you. Generally lend

ANZ are offering a higher LVR now for owner occupier commercial property. Just depends who you're dealing with.

 

Quoting clients 2.05% fixed p&I 3 years then 2.90% variable. For commercial warehouse max 70% lvr, 15 year term. Sub 1m

Crazy

 

That's a great rate

 

That's a bit limiting for anything other than entry level properties (which won't attract the sought after 'high quality' tenants).

 

I think he means sub $1m pa rental

 

$1m max debt exposure with the lender (yep, seems light)

 

Guys, is there any commercial lenders with great rates (< 3%) that may re-finance and not
including other resi IP debts for servicing? My existing loan is 70% LVR at 3.7% IO.

Thanks!!!