Commercial Loan Refinance Calculator (2026): What a Rate Change Saves, and When Switching Pays Back
A refinance from 7.25 to 6.25 per cent on a $1,200,000 property secured loan with twelve years to run saves about $635 a month and roughly $91,000 of interest over the term, and it pays back around $6,000 of switching costs inside the first year. That is the worked example further down this page. The calculator below runs yours, in the time it takes to read a statement.
This commercial loan refinance calculator does one thing the rate quote never does: it turns a rate change on a commercial property loan, equipment facility or business term loan into monthly dollars, total interest over the remaining term, and the number of months it takes to pay back the cost of switching. Enter your balance, current rate, the rate on offer and the remaining term. The result is illustrative arithmetic, not an assessment, but it is the number that decides whether a refinance conversation is worth having.
- The calculator turns a rate change into three numbers: the monthly saving, the total interest saved over the remaining term, and the month the switch pays back its costs.
- Worked example: a refinance from 7.25 to 6.25 per cent on a $1,200,000 property secured loan with twelve years to run saves about $635 a month and roughly $91,000 of interest, and pays back around $6,000 of switching costs inside the first year (illustrative only, standard amortisation).
- Use the rate on your statement, not the rate you signed at: the current rate is the input that most often changes the answer.
- Four levers set the rate on offer: security, loan to value, financial strength and lender appetite, and a valuation that has risen is often the biggest lever a refinance pulls.
- The arithmetic misses four things: interest only periods, annual line or review fees, a term reset that raises lifetime interest, and changes in security.
- A refinance pays when the monthly saving clears the switching costs well inside the time you intend to keep the facility.
- A review with a former banker is free and carries no obligation.
How do you use this commercial refinance calculator, and what goes in each box?
To use the commercial refinance calculator, enter four figures: the loan balance you owe today, the years remaining on the current loan, the rate on your latest statement, and a genuine written rate on offer for your file. Add estimated switching costs to see the month the refinance pays back. The result is illustrative arithmetic, not a quote.
- Loan balance is what you owe today, not the original facility limit.
- Remaining term is the years left on the current loan; if the refinance would also change the term, run the calculator twice, once with the current term and once with the proposed one, because a longer term lowers the repayment while raising total interest.
- Current rate is the rate on your statement, not the rate you were quoted at settlement.
- Rate on offer is a genuine written indication for your file; an advertised rate is a ceiling for standard files, not a quote.
- Switching costs are the discharge fee from the current lender, any break cost on a fixed rate, the new lender’s establishment and valuation fees, and legal and registration costs; our guide to the cost of refinancing a commercial loan lists them line by line.
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What does the calculator not capture?
The commercial refinance calculator does not capture four things that often decide the outcome: interest only periods, where the saving is simply the rate difference on the balance; annual line or review fees hidden behind a headline rate; a term reset that lowers the repayment but raises lifetime interest; and changes in security, such as moving from unsecured to property secured.
Four things sit outside the arithmetic and often decide the outcome.
- Interest only facilities. Many commercial loans run interest only for a period, where the saving is simply the rate difference on the balance, and the calculator’s principal and interest figure overstates the repayment on both sides.
- Fee structures. Some commercial facilities carry annual line fees or review fees that a headline rate hides, and a lower rate with a higher fee can cost more.
- The term reset. Refinancing an eight year remaining term onto a new fifteen year facility reduces the repayment dramatically and increases lifetime interest, which may be exactly right for cash flow and exactly wrong for a business that wants the debt gone.
- Security. Moving a facility from unsecured to property secured, or releasing a cross collateralised residential property, changes the pricing and the risk in ways no calculator shows.
Our guide to refinancing a business loan covers the structural side.
What are the four levers behind the rate on offer?
The rate on offer for a commercial loan is set by four levers: the security behind the facility (property secured prices lowest, then equipment, then unsecured), the loan to value ratio, the financial strength shown in current financials or a strong twelve month repayment history, and each lender’s appetite for your industry and facility type that quarter.
Commercial pricing is set on the file, not from a rate card, and four levers move it.
- Security. Property secured facilities price lowest, then equipment, then unsecured, with private lending above all.
- Loan to value. The lower the debt against the security’s value, the sharper the rate, and a valuation that has risen since you last borrowed is often the single biggest lever a refinance pulls. How the LVR ceiling varies by asset type is covered in our commercial property loan deposit and LVR guide.
- Financial strength. Clean, current financials showing the business services the debt on its own earn the best pricing; a strong twelve month repayment history can carry a like for like refinance where the financials are thin.
- Lender appetite. Each lender’s hunger for your industry and facility type moves quarter to quarter, which is why the same file can price differently at two banks in the same month. Our commercial loan rates guide sets out the current bands.
In short: security, loan to value, financial strength and lender appetite set the rate on offer, and the valuation behind the LVR is the one lever that can move without the business changing.
When does a commercial refinance pay?
A commercial refinance pays when the monthly saving clears the switching costs well inside the time you intend to keep the facility, when a fixed rate is rolling onto a punitive variable, when a business can move an unsecured or fintech facility onto property security, or when a stronger valuation lets several loans consolidate into one cheaper structure.
It pays when:
- the monthly saving clears the switching costs well inside the time you intend to keep the facility;
- a rate is rolling off a fixed period onto a punitive variable;
- the business has outgrown a fintech or unsecured facility that could now be property secured;
- a stronger valuation lets you consolidate several loans into one cheaper structure.
A refinance that exists to release working capital should be assessed on the value of that capital to the business, not on the rate alone; our guide to releasing equity from a commercial property covers that decision.
Turn the calculator’s number into a written offer.
Fifteen minutes with a former banker on your facilities, your security and your financials, and we come back with what the market would actually write for your file, lender by lender.
Get my real numberA worked example, illustrative only
A business carries a $1,200,000 property secured loan with twelve years remaining at a rate that has drifted well above what the same lender now writes for new customers. A refinance from 7.25 to 6.25 per cent, on the same term, reduces the monthly repayment by about $635 (from $12,501 to $11,866) and total interest over the term by roughly $91,000, on standard amortisation. With around $6,000 of switching costs, the break even arrives inside the first year.
Change one input and the answer changes: on a four year remaining term the same rate gap saves far less in total, and if the current loan is fixed with a large break cost the break even moves further out. Run your own figures above; the shape of the answer matters more than the exact dollars.
What we see every week. The input that most often changes the answer is not the rate on offer but the current rate. Owners type the rate they signed at; the statement shows the rate after every increase since. Run it again off the statement and the same facility usually shows a gap worth a conversation.
Frequently asked questions
How do I calculate the saving from refinancing a commercial loan?
Compare the repayment at your current rate with the repayment at the rate on offer over the same remaining term, then subtract switching costs. The calculator on this page does that arithmetic and shows the monthly saving, the total interest saved over the term and the month the switch pays for itself.
What does it cost to refinance a commercial loan?
Typically a discharge fee from the current lender, any break cost on a fixed rate, the new lender’s establishment and valuation fees, and legal and registration costs. Some are waived on competitive deals. Enter your estimate in the calculator to see the break even month.
Does the calculator work for interest only commercial loans?
It calculates a principal and interest repayment. On an interest only facility the saving is simply the rate difference applied to the balance, so the monthly figure will be different, though the total interest comparison over an interest only period is close to the rate gap multiplied by the balance and the years.
When does refinancing a commercial loan pay?
When the monthly saving clears the switching costs well inside the time you plan to keep the facility. It also pays when a fixed rate is rolling off onto a punitive variable, when an unsecured or fintech facility can now be secured against property, or when a stronger valuation lets several loans consolidate into one cheaper structure. A refinance that mainly exists to add debt should be judged on the value of that capital, not on the rate.
What inputs does the commercial refinance calculator need?
Four figures: the loan balance you owe today, the remaining term in years, the current rate on your statement, and the rate on offer for your file. Switching costs are optional; add them to see the month the refinance pays for itself.
Does refinancing a commercial loan onto a longer term save money?
It lowers the repayment and raises total interest. Refinancing an eight year remaining term onto a new fifteen year facility reduces the monthly figure dramatically while increasing lifetime interest, so run the calculator twice, once with the current term and once with the proposed one.
Why does the current rate matter more than the rate on offer?
Because owners often type the rate they signed at, while the statement shows the rate after every increase since. Run the calculator off the statement rate and the same facility usually shows a gap worth a conversation.
Related guides
The rate on offer is a negotiation. Start it with the right number.
Bring your statements and your facilities. A former banker will tell you which lenders would sharpen the rate for your file, and by how much.
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