Commercial Loan Rates

[Miss V]

Does anyone know any websites that advertise commercial rates? I have looked at Westpac and ING and they don't seem to advertise rates like they do for residential loans.

Also fees and charges? My mortgage broker is looking for me, but I would like to be able to research for myself.

Cheers

V

 

[Rolf Latham]

Hiya Miss V

Comm is a bit more diverse and there is a fair bit of negotiability.

Fees and charges and rates, and terms generally can vary much more widely than on residential.

ta
rolf

 

[Miss V]

Crickey!
Thank you Rolf.
Damn me for being so close minded about comm till I needed it. I have found the "It" of my deals that I want to persue. You know how they talk about one in 1000, this is it...and yes (I know there will be 1000 more) Damnit I want this one!

The only thing affecting the deal is now I've gone from 80% to 70 %. And damn that is a great deal of money suddenly.

Crap Crap and bigger crap.... (sorry mods)

 

[eggnog]

Ban her for foul language mods

 

[kili]

Commercial typically (not always) works on a base rate plus a margin. The margin is reflective of the risk borne by the bank. It relates to you as a creditor, the property as risky asset and the market as an unpredictable mess. This is why it's harder to find accurate quotes.

 

[plusnq]

Ban her for foul language mods

Imodium might help better

http://www.imodium.com/



Cheers

Shane

 

[grossreal]

hi miss v
as a rule rates are a base and margin that is true
but the other thing you require is a lender that wants to lend
and in this market that alot harder to find.
most of the commercial guys have either frozen their funds
sacked there employees
or are buying smaller funders
so there isnot alot of open draw strings in this market.
70% is high in commercial lending at the moment not low most are down to 60% and I have a couple that have told me 50% lvrs and that cbd property
so 80% is funny as thas all it is.
the good comm guys are still putting thru deals but it is very very hard.
out of 10 loans they might get thru 1 and thats only if it has no hairs on it as they say.
unless you have money or high equity backing you and looking at 50 to 60% lvr this is not the market to be going to funders as they will give you all the reasons in the world why credit should do the deal but credit will say no.
so rates are not the issue funders are
rates also have not come off that much from before about 8% is the norm.
so have fun

 

[Miss V]

Thanks all.

The deal I am looking at (which I got!!!) Is 4 flats and an attached shop. Even though it is getting a higher income from the residential part, and is listed a residential on the contract, my MB says that is going to be commercial. Does this sound right?

Cheers

V

 

[grossreal]

yes
any form of commercila will be seen as comm
you can split the oan so even thou its got comm you can do resi on the flats and comm on the shop
I would split and in this market if the resi is positive then you have a better chance of getting the resi lender to lend on the comm as well
so I would go for a resi loan and attach the comm to the deal not the other way around will be alot easier
also try to go to a lender that does still use a bit of manager iteraction so nab would be my best option they are hard at the moment but if you go for the resi first and attach you should be ok
rates are not the issue at the moment who is willing to lend is
have fun

 

[Miss V]

Thanks grossreal,

I am not sure how to do that? It is all on the one title. The deal is positive cash flow so not too worried about servicing, but finding 30% plus costs is going to use up more equity than I would have liked.

Cheers

V

 

[kili]

Plus you'll most likely have a higher interest rate. One of my full-doc comm loans is still sitting at 9.59% variable! I called the bank and they said it will most likely come down soon, but that's little comfort, especially since I can't see them dropping it 3% to catch up to resi.

 

[Fundamental]

Hi Miss V.

At the absolute most, you'd be looking at a variable rate of 8% (That's with ING Direct Commecial), but depending on many factors (the pereceived risk to the bank, borrowing amount, LVR, etc) you could be as low as the high 6's/low 7's.

 

[Plan_Trader]

What about establishment fees on say $5mill - what would be this typically be and can you ask for it ti be reduced?

 

[Wiseguy]

ING commercial rates http://introducer.ingdirect.com.au/commercial/rates.htm

 

[Qlds007]

Typically on a $5M deal you would probably be charged between 0.35 - 0.6% application / establishment fee.

Yes you can ask for it to be reduced but as has been mentioned given the complete disappearance of many commercial lenders those left are really in the box seat.

 

[eKwatee]

Miss V,
Could you maybe look at funding the commercial portion with any super you may have, or maybe the deposit portion. Not sure exactly how it works but I know a couple of people who recently purchased commercial properties with their super.

 

[grossreal]

hi all
couple of things
1. super and investing and how you do that is not something to have a stab at
there are some very interesting rules in how you can and can't do
and i'm not going to go into that here
but to invest with your super
it need to be around 250k and has to be arms lenght
and has to be shown to be able to be seen as a legit business transaction
so yes is possible but you need an accountant to set that up( to do it correctly I think)
as for player in the market there are alot
they are just not the norms and rates are all over the place
so the comm market at the moment for me is a little a pen of sheep with about 5 cattle dogs running around in it.
and the groups keep going one way and then back flip and go another way
so anyone that says they understand it to me is just silly
why half the people on the floor above the 20th in the cbd banking don't
there are lenders lending and they are lending big licks of money the issue is not rates its do they understand the market
and alot simply don't
as for 5 mil
thats the lower end of comm lending and you are into the 8 and 9% and for me
the heads up is that I would not be jumping into that area at this moment.
the 2 to 6 mil comm and the 1 to 6 mil in resi for me is the hottest I have seen it and the burner is still going
so any lender thats going into that market needs to be wearing kevlar.
yes people look at it and think that looks great and we want to buy into that market
well some one has to lend you the money into that market and strap on the kevlar
if you have the cash or the ability for that cash then yes different question
but if you want a funder to fund you into that market the rates are not the issue exposure is.
oh and there are not alot of guy willing to put on that kevlar at the moment.
we are
so I know how frightened these guys are.
and alot think this will be their last current works party
and they also are not getting there bonus's and its the bonus that keeps them afloat.
just a different way of looking at it

 

[Miss V]

It looks like I'll be going with NAB. Their current rates are low 7, but they have very high monthly fees. ING would have been my prefered lender, but won't lend as the units are under 50 sqm. Stupid rule as I'm buying them as a block, but thems the breaks.

Cheers everyone

V

 

[Peter_Tersteeg]

The deal I am looking at (which I got!!!) Is 4 flats and an attached shop. Even though it is getting a higher income from the residential part, and is listed a residential on the contract, my MB says that is going to be commercial.

It's definitely commercial as it stands.

Are the units on different titles? It might be possible to purchase them under separate contracts as residential and then get the shop done separately under commercial.

You'd probably get a very average loan for the shop in the current market, but much better loans on the units. Under 50 square meters has its own set of challenges, but it is achievable.

 

[pursefattener]

I have a loan with nab that is fixed for 5years at 8.75 . 3 1/2 years to go . It's industrial in a regional town with a national tenant .

I locked in for the length of the lease but realise now I should have stayed variable or fixed maybe 2 years only . Be careful with fixed rates...my 5 cents worth .