Interest Rates on Commercial Property

Discussion in 'Commercial Property' started by Followingdry, 15th Feb, 2021.

Join Australia's most dynamic and respected property investment community
  1. kmrr

    kmrr Well-Known Member

    Joined:
    29th Jun, 2015
    Posts:
    267
    Location:
    Melbourne
    My banker today said they have 2.49 fixed available for the next 2 weeks. ANZ.
     
  2. Chabs

    Chabs Well-Known Member

    Joined:
    24th Jun, 2015
    Posts:
    577
    Location:
    Sydney
    with a commercial security? What’s the rate for IO? Can be variable or fixed
     
  3. kmrr

    kmrr Well-Known Member

    Joined:
    29th Jun, 2015
    Posts:
    267
    Location:
    Melbourne
    IO fixed for 3y Max i think. He mentioned it while discussing my current io fixed so I'm assuming it's the same parameters.
     
  4. Joseph33

    Joseph33 Well-Known Member

    Joined:
    16th Mar, 2017
    Posts:
    150
    Location:
    Nsw
    Hey Tarek,

    Any idea what kind of rates and lvr for a commercial loan in SMSF?

    it seems that most lenders stay clear of these loans
     
  5. Property Guts

    Property Guts Well-Known Member

    Joined:
    16th Jun, 2018
    Posts:
    157
    Location:
    Australia
    just settled on an industrial, great rate with CBA, of 2.4% variable. But get this, 50% LVR (with additional property), but CBA would only lend to 90% of purchase price. (got a quote of Suncorp, and same there too).
    Settlement was 7 days late, CBA lost the documents, we copped the penalty fees. Plus the grilling of questions was equivalent to a PhD thesis. Got there in the end, with a great rate. But not easy.
    Banks are very good at managing risks, i would buy bank shares on the ASX.
     
  6. FXD

    FXD Well-Known Member

    Joined:
    30th Aug, 2018
    Posts:
    288
    Location:
    Melbourne, Victoria
    "Only" 90% of the purchase price ? lol
    THought that is quite reasonable. Anyway, did u know if the val come in really high to support
    90% lending or was it on the basis u put up other property as extra security?

    Was the lending cross between the two properties?
     
  7. Property Guts

    Property Guts Well-Known Member

    Joined:
    16th Jun, 2018
    Posts:
    157
    Location:
    Australia
    yes, two properties as security, to make a LVR of 50%.
    Val was same as purchase price
    I think CBA just wanted to see us put some cash into the deal.
     
  8. Chabs

    Chabs Well-Known Member

    Joined:
    24th Jun, 2015
    Posts:
    577
    Location:
    Sydney
    surely that second property was residential, in order to get the 2.4% rate?

    that’s a super deal if not... would love to learn how to find or negotiate these deals. Have the 50% lvr situation.
     
    Beano likes this.
  9. FXD

    FXD Well-Known Member

    Joined:
    30th Aug, 2018
    Posts:
    288
    Location:
    Melbourne, Victoria
    What is the LVR for this product and does it have any annual fees??
     
  10. kmrr

    kmrr Well-Known Member

    Joined:
    29th Jun, 2015
    Posts:
    267
    Location:
    Melbourne
    I'm not sure sorry. We didn't go into detail but i would presume 3 years.
     
  11. mkbonline

    mkbonline Well-Known Member

    Joined:
    8th Apr, 2019
    Posts:
    192
    Location:
    Kellyville, NSW
    Which lender you would recommend for Commercial ?
     
  12. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    10,599
    Location:
    Gold Coast (Australia Wide)
    How long is a piece of string............some clients like the comfort and cashflow benefits of a 25 year loan term, while for others focus on rate

    Sub 1 mill lend some of the majors have a simplified process, one second tier has a proper offset account on variable, and a few will do lease docs relying just on a solid lease income

    Comm lending is a bit of a shark tank, and not as transparent as regulated resi

    ta
    rolf
     
  13. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    1,648
    Location:
    Sydney
    If the loan is under $1mil then ANZ is still superior in this space and its not even close. They have some of the sharpest rates, no annual reviews (extremely important), high LVR's, low app fees, good servicing, etc. However this is a vanilla scenario.

    Rolf's comments above are correct and will really depend on the specific scenario, servicing, security type, etc.
     
  14. FXD

    FXD Well-Known Member

    Joined:
    30th Aug, 2018
    Posts:
    288
    Location:
    Melbourne, Victoria
    How is ANZ's servicing among big 4?
     
  15. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    1,648
    Location:
    Sydney
    Its outstanding as they work off a longer loan term than say NAB or CBA. They win 9 of out 10 times when the loan amount is under $1mil. When you get over $1mil then that's a completely different story.
     
  16. FXD

    FXD Well-Known Member

    Joined:
    30th Aug, 2018
    Posts:
    288
    Location:
    Melbourne, Victoria
    What LVR can they go up to? THanks man
     
  17. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    1,648
    Location:
    Sydney
    Depends on the scenario but up to 80%.
     
  18. Player

    Player Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,097
    Location:
    Paradiso
    If refinancing from one lender to another, will the new lender(s) entertain a new interest only term before reverting to P&I? Current lender has advised no more IO period. Are commercial products APRA influenced or is it negotiable on a case by case basis?
     
  19. Beano

    Beano Well-Known Member

    Joined:
    7th Apr, 2016
    Posts:
    3,346
    Location:
    Brisbane
    Which bank have you found is the best for $50m to $100m commercial loans Shahin ?
     
  20. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    1,648
    Location:
    Sydney
    It depends on the security and the terms - rate offered is similar across the lenders. It is the terms, conditions and servicing that will differ.