Commercial property loan rates in Australia: the 2026 guide
A commercial property loan rate in Australia is priced off two components: a benchmark, usually the RBA cash rate or the bank bill swap rate, plus a margin set by LVR, security quality and borrower risk. Aurelius Private are private lending brokers — we arrange and place first-mortgage commercial deals across a panel of 131+ private lenders, which means we see both sides of the pricing conversation: what the banks are quoting this month, and what the private market charges when a bank's credit committee says no.
This guide sets out where rates sit right now, what actually moves them, and how to weigh a bank quote against a private first-mortgage quote on the same deal.
Where rates sit right now
Bank commercial property loan rates for prime, owner-occupied security currently start around 6.25% per annum, with investment-purpose lending generally beginning from about 6.50% per annum.[4] Across the full bank and non-bank market, once LVR, documentation level and asset type are factored in, the published range stretches from roughly 6.05% to 14% per annum.[3]
Private first-mortgage pricing sits in its own band: 8% to 14% per annum, depending on LVR, term, security position and exit certainty.[5] A stabilised commercial or industrial asset with credible tenant covenants, financed to 60–70% LVR, typically prices toward the lower end of that band, with establishment fees of 1% to 2% of the loan amount on top.[5]
| Bank first mortgage | Private first mortgage | |
|---|---|---|
| Typical LVR | Up to 65–70% | Up to 65–70%, higher by exception |
| Indicative rate band | 6.25%–10.5% p.a. | 8%–14% p.a. |
| Pricing basis | Cash rate or BBSY plus margin, full credit assessment | Deal-by-deal, security and exit-led |
| Settlement | Typically 4–8 weeks | Often 5–15 business days |
| Documentation | Full financials, serviceability testing | Asset and exit-focused, lighter documentation |
The gap between the two columns is the price of speed and certainty. A bank loan is cheaper if the timeline allows for a full credit process. A private first-mortgage deal costs more per annum but removes the settlement risk that kills off-market purchases, tight construction drawdowns and expiring option deadlines.
Why rates moved in 2026: the RBA cash rate
The RBA cash rate sits at 4.35% as at the July 2026 meeting, unchanged since May.[1][2] That 4.35% follows three consecutive 25 basis point rises earlier in 2026: February (to 3.85%), March (to 4.10%) and May (to 4.35%), after a period of holds and one cut through late 2025.[1] For any borrower whose commercial loan is priced at cash rate plus margin, this year's rate moves are the reason the quote sitting in their inbox is higher than the one they got twelve months ago.
Private lending doesn't ignore the cash rate, but it isn't purely mechanical either. Non-bank lenders price cost of funds plus a risk margin set deal by deal, so a private quote reacts to the specific asset and borrower in front of it as much as to the RBA's last decision.
LVR is the single biggest driver of your rate
LVR moves your rate more than any other single factor. Every 10 percentage points of LVR reduction typically saves 0.25 to 0.75 percentage points on the quoted rate.[3] On an $8M industrial asset, moving from 60% LVR ($4.8M advance) to 75% LVR ($6M advance) means a bigger loan and a materially higher rate applied to the whole balance.
Rough LVR bands to work from:
- Up to 60% LVR — best available pricing, both bank and private.
- 60–70% LVR — the standard commercial band, with a moderate margin step-up.
- 70–80% LVR — a sharp increase in margin, and many banks stop lending here for investment-purpose deals.[4]
- Above 80% LVR — rarely written by banks. Private lenders will consider it deal by deal, priced toward the top of the 8–14% band.
Fixed vs variable commercial property loan rates
Variable commercial rates currently range from around 6.05% to 12% per annum. Fixed rates for 1 to 3-year terms sit between 6.5% and 9% per annum, and 5-year fixed terms run roughly 7% to 10% per annum.[3]
The choice is a cash-flow decision, not a rate-shopping one. Variable pricing tracks the cash rate directly, which cuts both ways in a year like 2026 where the RBA has been moving. Fixed pricing buys certainty for the term of a construction or bridging facility, but usually carries break costs if the asset sells or refinances early. For a deal with a defined exit inside 12 to 24 months, most borrowers we place take variable and manage the exposure through the exit plan rather than paying for a fixed rate they won't hold to term.
Bank vs private: when the higher rate is the cheaper deal
A bank quote at 7% looks cheaper than a private quote at 10.5% on paper. It stops being cheaper the moment the bank's credit process runs past the settlement date, the asset has a condition the bank's policy won't touch, or the borrower needs the funds inside two weeks rather than eight. In that scenario, the private rate is the price of the deal happening at all.
Before comparing headline rates, ask the deal-shape question: does the timeline, the security and the documentation on hand fit a bank's standard credit box, or does this deal need a lender who prices the specific asset and exit rather than a policy checklist? Our piece on private lender vs bank for commercial property covers that trade-off deal type by deal type. If private credit is new territory, start with what private lending is and how it works in Australia.
What else moves the number beyond LVR
Five factors set the margin on top of LVR:
- Security quality — a leased industrial asset with a long WALE prices better than a vacant retail site.
- Loan size — very small and very large facilities both attract wider margins than the mid-market sweet spot.
- Documentation depth — full financials price sharper than low-doc or asset-lend structures.
- Borrower profile — track record, other debt, and prior dealings with the lender all move the number.
- Exit certainty — a pre-sold development or a signed contract of sale prices better than an open-ended hold.
Common questions on commercial property loan rates
What is a good interest rate for a commercial property loan in Australia in 2026?
For a bank first mortgage on a prime, tenanted asset at 65% LVR or lower, a rate in the 6.25–7.5% per annum range is competitive.[4] For a private first-mortgage deal at the same LVR, 9–10.5% per annum with a 1–2% establishment fee is a reasonable market price.[5]
Why are commercial property loan rates higher than residential rates?
Commercial security carries higher risk of vacancy, single-tenant concentration and slower resale, so lenders price a risk premium on top of the residential benchmark. Documentation and serviceability testing are also more complex, which widens the margin further.
Do commercial property loan rates track the RBA cash rate?
Variable-rate commercial loans track the cash rate directly through their margin structure. Fixed-rate commercial loans and most private first-mortgage pricing are set against cost of funds and deal-specific risk, so they move with the cycle but not tick for tick with each RBA decision.[1]
Is a private commercial loan always more expensive than a bank loan?
On a like-for-like annual rate, yes. On total cost when a deadline, condition, or documentation gap would otherwise kill the transaction, a private first mortgage that settles in days rather than weeks is often the cheaper outcome once the alternative is priced in.
What LVR will a commercial lender allow?
Banks generally cap investment-purpose commercial lending at 65–70% LVR, tighter for secondary assets. Private lenders on Aurelius Private's panel will consider deals up to and above 70% LVR case by case, priced accordingly.
Get a rate you can actually settle on
Rate comparisons only mean something once they're tested against a real deal. Submit the scenario with the asset, LVR and timeline, and we match it against a panel of 131+ private lenders to bring back a structure and pricing band your bank alternative can be measured against — before any formal application goes anywhere. To see what happens after you submit, read how Aurelius Private places deals.
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