Refinancing Interest Rates for Commercial Property in Singapore

If you own an office unit, retail shop, shophouse or industrial property, you may be wondering what refinancing rates look like. The short answer: commercial property loan rates are quoted on a case-by-case basis and are rarely publicised.

Unlike residential home loans, where banks standardise their packages, commercial property rates are usually only shared once a bank has reviewed your specific situation.

Why Aren't Commercial Rates Published?

Commercial loans are priced individually because every deal carries a different level of risk for the bank. The rate you're offered depends on factors such as:

• Property type: office, retail, shophouse, industrial (B1/B2) or mixed-use
• Loan amount: larger loans may qualify for sharper pricing
• Loan-to-Value (LTV): how much you're borrowing against the property's value
• Borrower profile: whether you're buying in your personal name or through a company, plus your income, credit history and financials
• Rental income: whether the property is owner-occupied or tenanted, and the strength of the lease
• Remaining lease and location: shorter leases or less liquid locations may affect pricing
• Your relationship with the bank: existing banking relationships can sometimes help

How Commercial Loans Usually Differ From Residential Loans

• Rates are typically higher than residential home loans
• Loan tenures are often shorter
• Rates are commonly pegged to SORA plus a spread, though some banks offer fixed-rate options
• Lock-in periods, early repayment penalties and fees vary from bank to bank
• Assessment takes longer, as banks may ask for company financials, tenancy agreements and a valuation

When Should You Consider Refinancing?

• Your lock-in period is ending or has ended
• Your current rate has gone up after the promotional period
• Your property value has risen and you want to review your financing
• Your business or rental situation has changed

Start reviewing your options 3 to 4 months before your lock-in ends, as commercial loan approvals can take longer than residential ones.

Let Cashew Do the Legwork

Getting commercial quotes usually means approaching banks one by one, sharing your documents several times and comparing offers that are structured differently.

Cashew can do this for you. Our mortgage consultants will:

• Reach out to multiple banks on your behalf
• Collect and compare the quotes in one place
• Explain the differences in rates, lock-ins, fees and terms
• Help you choose the package that best fits your property and plans