Commercial refinancing in 2026: Why lender fit matters more than ever

Rates have changed the refinancing conversation

Commercial borrowers entering a refinance in 2026 are dealing with a different credit environment from the one many expected a year ago. The Reserve Bank’s cash rate is now 4.35%, following three increases this year, and higher funding costs are flowing through the market. That does not mean lenders have stopped lending. Recent CBRE research found appetite for new real estate loans remains positive. What has changed is the emphasis of the credit conversation.

“Lenders have passed on the recent cash rate increases to mortgage and business lending rates.” Reserve Bank of Australia, Statement on Monetary Policy, August 2026

What lenders are looking at now

For a refinance, the existing loan balance is only the starting point. Lenders are increasingly focused on how the property and borrower are performing today: rental income, lease profile, interest cover, valuation, gearing, borrower liquidity and the credibility of the repayment or refinance strategy.

A transaction that looked straightforward when it was first written may no longer fit the same lender or structure at maturity. A valuation may have moved. Interest costs may be higher. A lease expiry may be closer. A development or repositioning strategy may have taken longer than expected. Those factors do not automatically make the transaction unfinanceable. They do change which lenders are likely to understand the risk and how the facility should be structured.

Structure before price

Experienced borrowers and advisers are therefore starting the refinance process earlier and testing more than the headline interest rate. The better questions are often: Does this lender understand the asset? How will it assess servicing? Is the proposed term aligned with the borrower’s exit? Are there conditions that could create difficulty later? Does the lender have appetite for this type of transaction?

In commercial finance, the lowest quoted rate can be irrelevant if the structure does not survive credit assessment or meet the transaction timetable.

The practical takeaway is simple: refinancing works best when current position, future pathway and lender fit are considered together—not when the search begins and ends with price.

Have a commercial finance requirement or refinance you would like to discuss? Contact the Allott Capital team.