Commercial loan

If you want to buy a commercial property, whether for your business or as an investment, we can help you secure a commercial property loan.

Buying commercial property has always been common for businesses – and, more recently, it’s also become an increasingly popular asset class for Australian investors.

Some investors choose commercial as a form of diversification, after already purchasing one or several residential investment properties. Others jump straight to commercial property investment because it tends to produce higher rental yields than residential.

But there is one thing that commercial and residential property investment have in common – which is that organising a commercial property loan is the most important part of the process. Because without a commercial loan, you won’t be able to buy a property (unless you pay cash).

The ins and outs of commercial property loans

An experienced mortgage broker, like Breakthru Home Loans, can help you look for some of the best mortgage deals in the commercial market.

Trying to find the best mortgage advisor is arguably more important with commercial than residential finance. That’s because organising a commercial loan may be harder and there may be fewer lenders to choose from. As a result, you want someone with the skill and experience to hunt for some of the best mortgage deals available.

Another important point to note about applying for a commercial property loan is that you may have to provide a larger deposit – perhaps as much as 30% of the purchase price, depending on your choice of commercial loan provider.

Regardless of your lender and loan-to-value ratio, it’s important to organise a commercial property loan pre-approval before you begin your property search. That way, you’ll have a clear idea of your budget. Also, you’ll seem like a more credible buyer, which will make vendors and sales agents more willing to work with you.

The pros and cons of commercial property investing

There are three main reasons why some property investors either prefer commercial to residential or see it as a nice balance.

First, as mentioned earlier, commercial property generally offers higher yields, which means it’s generally easier to repay a commercial loan than a residential loan.

Second, not only are you likely to enjoy higher income compared to residential property; you’re also likely to enjoy lower expenses. That’s because commercial tenants generally pay for maintenance, council rates and even property management fees. Potentially, the money you save could be directed to your commercial loan repayments.

Third, a typical commercial lease might last for five years (with built-in annual rental increases), compared to one year for a residential property. That can mean stronger cash flow, which, again, can make it easier to manage a commercial loan than a residential loan.


That said, investing in commercial property includes some negatives.

First, as mentioned earlier, you’ll generally need a larger deposit for a commercial property loan than a home loan, which may mean a larger barrier to entry. Also, there are fewer commercial loan providers than residential lenders, which means less choice.

Second, while commercial yields are generally higher than residential, capital growth is generally lower.

Third, while commercial leases generally last longer than residential leases, so do vacancies, because the number of businesses that might suit a particular commercial property is likely to be lower than the number of people who might suit a particular home. That’s why it’s important to have financial buffers in place – so you can keep making your commercial loan repayments even if your property is empty.

The different types of commercial property

The seven main types of commercial property are:

Office Buildings

Retail Shops

Industrial Sites

Hospitality Venues

Medical Centres

Apartment Blocks

Whatever type of asset you prefer, an experienced mortgage broker, like Breakthru Home Loans, can help you secure a competitive commercial property loan.

Expert mortgage broker for commercial property investors

Commercial property can be a great investment. But securing the right commercial property loan can be challenging, particularly as lending policies and interest rates aren’t set in stone or widely publicised.

That’s where Breakthru Home Loans comes in. We’ve got the key relationships you need to secure you a great deal on a commercial property loan.

Also, we’ll do all the hard work on your behalf, including hunting for some of the best mortgage deals in the commercial loan market and then managing the application process.

Looking for a commercial property loan? Get in touch with us today.