Commercial Property Investment Mortgage
A commercial property investment mortgage gives you access to finance for office buildings, retail spaces, industrial warehouses, and mixed-use developments. Whether you're an investor seeking strong rental yields or a business owner buying your own premises, Smart Mortgage Corp connects you with the right commercial mortgage from 40+ lenders across Australia.
Why Invest in Commercial Property
Higher Rental Yields
Commercial properties often offer higher rental returns compared to residential properties, with net yields ranging from 5% to 10% depending on the asset type and location.
Long-Term Lease Agreements
Commercial tenants typically sign longer leases (3-10 years), providing stable and predictable income compared to residential tenancies
Tenants Cover Outgoings
Unlike residential properties, many commercial leases are net leases, meaning tenants are responsible for paying expenses such as council rates, insurance, and maintenance.
Diversification & Capital Growth
Investing in commercial property can diversify your portfolio, reducing reliance on residential markets and offering capital appreciation over time.
Types of Commercial Property Investments
Office Buildings
- Suitable for businesses seeking professional workspaces. - Demand fluctuates based on economic conditions and work-from-home trends. - Premium locations attract high-quality corporate tenants.
Retail Properties (Shops, Shopping Centers, Showrooms)
- Includes standalone shops, shopping centers, and large retail outlets. - Success is driven by foot traffic, visibility, and consumer demand. - Long leases with major retail brands offer investment stability.
Industrial & Warehousing
- Includes factories, warehouses, logistics hubs, and manufacturing plants. - High demand due to growth in e-commerce and logistics. - Typically lower maintenance and longer lease terms.
Mixed-Use Developments
- Combines residential, commercial, and retail in one project. - Offers diverse income streams and reduces reliance on a single tenant type. - Common in high-growth urban areas.
How a Commercial Property Investment Mortgage Works
Loan-to-Value Ratio (LVR)
- Banks typically lend 65-75% of the property value, meaning investors need a 25-35% deposit. - Higher LVRs (up to 80%) may be available for stronger assets or owner-occupied properties.
Loan Terms & Repayments
- Loan terms range from 5 to 30 years, with interest-only or principal & interest options. - Interest rates vary based on risk, asset type, and borrower profile.
Security & Collateral
- Loans are secured against the commercial property itself. - Some lenders may require additional security or personal guarantees.
Tenant Strength & Lease Terms
- Lenders assess the tenant’s financial stability and lease duration. - Long-term leases with blue-chip tenants can improve borrowing power.
Owner-Occupied vs. Investment: Which Loan Type Suits You?
Buying Premises for Your Business
- Designed for business owners purchasing the property they operate from. - Lenders may offer higher LVRs (up to 80%) and more competitive rates than investment loans. - Builds equity in an asset rather than paying rent indefinitely.
Buying as an Investment
- For investors looking to generate rental income and long-term capital growth. - Lenders assess the tenant's financial strength and remaining lease term alongside your financials. - Typically requires a larger deposit (25–35%) than residential investment loans.
A commercial property investment mortgage is a loan secured against a commercial property — such as an office, retail shop, warehouse, or mixed-use building — used to generate rental income or capital growth. Unlike residential mortgages, commercial mortgages are assessed on the property's income potential and the borrower's business financials.
Most lenders offer up to 65–75% LVR for a commercial property investment mortgage, meaning you'll need a 25–35% deposit. Higher LVRs may be available for strong assets or owner-occupied premises. Our brokers will assess your situation and help you understand your borrowing capacity before you apply.
Typically you'll need 2 years of business and personal tax returns, financial statements (profit & loss, balance sheet), bank statements (last 3–6 months), details of existing leases, and information about any existing debts. Our team will guide you through the exact requirements for your chosen lender.
Some commercial mortgages can be conditionally approved within 48–72 hours for straightforward applications. More complex commercial property investment deals may take 2–4 weeks due to property valuations and lease assessments. Our brokers help you prepare a strong application to avoid unnecessary delays.
Yes. Self-managed super funds (SMSFs) can take out a commercial property mortgage under a limited recourse borrowing arrangement (LRBA). This is a popular strategy for business owners who want their SMSF to purchase the premises their business operates from. Our brokers work with your accountant and financial adviser to structure the right solution.