Commercial Loan Interest Rates

[GreenTreeFrog]

What are the interest rates on your commercial loans and who are they with?

I can't find anything below 8% and really would like to get it below that.

Thanks!

 

[APerry]

Hi GTF,

How much are you borrowing and what sort of property. You should be able to get below 8%, but not by much unless you are borrowing a lot.

Regards
Alistair

 

[GreenTreeFrog]

Retail property worth $600k and I am 50% of that so my borrowings would be $240k at 80%.

Just a drop in the ocean.

Thanks.

 

[APerry]

Hi Melissa,

If there is two of you you will have to use the same lender with one split to you with the other person as guarrentor and visa versa. You can get 7.66% on a 3 year fixed or 7.9% variable on that amount, no ongoing fees. The LVR would be dependent on your strength as a bowwoer and ther strength of the deal, 80% is possible, but can't be guarrenteed.

Regards
Alistair

 

[GreenTreeFrog]

Thanks for those rates. With whom are they through?

My business partner is funding his half from his own equity.

Thanks!

 

[APerry]

The lender is Bank West

 

[Glucose]

Do you know what LVR Bank West goes to on commercial? And do they go on what the property is earning for servicability or do you have to prove you can service it anyway?

 

[APerry]

Do you know what LVR Bank West goes to on commercial? And do they go on what the property is earning for servicability or do you have to prove you can service it anyway?

Fir loans up to $2 million, their 3 an 5 year rates have actually dropped to 7.60%. They do 70% as policy, but you can go higher than this, dependent on the strength of both the borrower and property. They have a servicability calculator.

If the loan is over $2 million it goes to a different section of the bank, pricing and servicing requirements are completely different. They are great for smaller loans but, apart for certain types of properties and situations, are often not in the market for larger loans.

Regards
Alistair

 

[Glucose]

thanks Alistair. Do you know where you would go for a larger Commercial property loan than Bank West handles?
Thanks,
Glucose.
PS--fir??

 

[APerry]

Hi Glucose,

BankWest do larger loans, they are just generally not the best choice above $2 mill, in my opinion. Having said this,there are circumstances where BW are a very good option. I generally use CBA or Westpac, If there are servicing issues then Suncorp are sometimes able to do stuff the other banks can't. What is your scenario and I'll give you a recomendation.

Regards
Alistair

 

[sailor]

BWest 60% over block of flats @ 8.09 IO.

 

[APerry]

Hi Sailor,

Is that LVR because of servicing or is that all they would give you in terms of security, if so it is strange as they will generally do 70% against anything, even vacant rural land which most banks won't do over 50% against. That rate is not current the rates given above are from last Friday, the fixed rates are a specfial offer and will not be around for long however.

Regards
Alistair

 

[sailor]

Hi Sailor,

Is that LVR because of servicing or is that all they would give you in terms of security, if so it is strange as they will generally do 70% against anything, even vacant rural land which most banks won't do over 50% against. That rate is not current the rates given above are from last Friday, the fixed rates are a specfial offer and will not be around for long however.

Regards
Alistair

Tis all they would do given it was a block of 4 flats, and not in a capital city. Rates are of Dec 06. But I don't mind cos we only paide $420K for the block and they will rent out next month at $200+ each per week. Can't complain about the int rate with that CF!

 

[grossreal]

hi all
suncorp is a very interesting lender in construction and commercial.
the rules are very flexable and I am yet to find two deals that are the same and the lvr can go from 56% to 80% on the same deal from two different managers and this is dealing direct not thru a broker.
the rates are flexible also depending on what you want them to do.
for me they are one of the hardest banks to deal with but once the deal is done one of the easiest to work with.
remember that all banks change staff, criteria and lending practise daily
so on one day a deal will be good for suncorp and the next its better to bankwest and then hsbc change and they are looking good
they are the same as watching a movie
the second time around the movie or the lender doesn't seem as good.
for me even thou people may say that it weakens a deal
I shop the deal around and find the best deal at that time for that deal.
and at the cost that I am happy with.
just as with resi it is not just interest rates that you have to look at.
its terms and conditions.
and Glucose the terms and conditions can be very expensive.
you have the markup on bankbill rate
line fees
account per month fees
and term interest loans
and as dazzling has said before
the devil is in the detail.
there is no comparitive rates in comm
so you do need to have new batteries in your calculator to make sure the deal is better.
and just like a used car dealer the bank managers will match or better a deal.
and at interest on 2 mil at 8% thats 160k you have a bit of fat to play with.
so in answer to your question.
Do you know where you would go for a larger Commercial property loan than Bank West handles
any bank
bankwest will go to 50 mil in construction.
there are different levels in all lenders and the higher you go
the better calculators they use
they are the same
the difference is the 0000 on the top of the calculators some have 8 x 0 and some have 12 x 0.

and at this level serviceability is not an issue
the issue is the deal and do the numbers stack up
and if the
as is the case with a tennanted property
if the tennant moves out can the loan be covered and how.

 

[APerry]

Tis all they would do given it was a block of 4 flats, and not in a capital city. Rates are of Dec 06. But I don't mind cos we only paide $420K for the block and they will rent out next month at $200+ each per week. Can't complain about the int rate with that CF!

Hi Sailor,

You can do 4 units as residential through a number of lenders, so 97% LVR.

Regards
Alistair

 

[sailor]

Hi Sailor,

You can do 4 units as residential through a number of lenders, so 97% LVR.

Regards
Alistair

OK!!!! I'm all ears! (Insert ear icon.) Would you mind naming a couple for me please? We went lodoc...so do your lenders do that too for 4-units resi?

 

[Mofra]

OK!!!! I'm all ears! (Insert ear icon.) Would you mind naming a couple for me please? We went lodoc...so do your lenders do that too for 4-units resi?

Hard part of a 4-unit single title deal through a standard lender is comparables - only a few suburbs Australia wide have sufficient market activity for the comparable sales (3 sales within 10% of valuation within 6 months).

 

[APerry]

OK!!!! I'm all ears! (Insert ear icon.) Would you mind naming a couple for me please? We went lodoc...so do your lenders do that too for 4-units resi?

That explains the lower LVR. You can lend 80% lo doc through Macquarie on 4 units, there are more that will do it as full doc.

Regards
Alistair

 

[sailor]

Thanks Alistair.