Refinancing commercial property: when it pays and how it works.
A fixed rate ending, a bridge to exit, equity to release, or a lender that wants you gone. Refinancing is where the largest single saving in most commercial portfolios sits, and where the timeline catches people out. Here is the honest version.
By Dominic Whitecross, Co-Founder, HyLend. Last reviewed September 2026.
The four reasons to refinance, and what each one needs
- A fixed rate or margin is ending. The reversion rate is often materially above the market. Start three to four months before the end date, because the process takes six to twelve weeks and the early repayment charge usually falls away on the end date rather than before it.
- You are on the wrong product. A completed development on development pricing, a stabilised asset still on a bridge, a portfolio on a mix of legacy facilities. Moving to term pricing on a completed, income producing asset is routinely worth several points a year.
- You want the equity out. A capital raise refinance replaces the loan with a larger one against the current valuation and releases the difference, most often as the deposit on the next purchase. The valuation basis and the income cover decide how much.
- The lender wants you gone. Appetite changes, sectors fall out of favour, funding lines close. A lender exit is a refinance with a deadline, and the earlier it is treated as one the wider the choice of replacement.
What the new lender is actually assessing
The valuation. A refinance has no purchase price to anchor to, so the loan is a percentage of whatever the valuer reports. On commercial security that report will carry market value, a restricted marketing figure and often a vacant possession figure, and which one the lender uses decides the loan. Establish it before instructing. How the valuation basis sets your loan size →
The income. For investment property, the tenant, the unexpired lease and the rent against market, expressed as interest cover. A short unexpired term is the most common reason a refinance produces a smaller loan than expected, and regearing the lease before you apply is often worth more than any negotiation afterwards. For owner occupiers, the accounts and the affordability of the new payment.
The exit from the old facility. Early repayment charges inside a fixed period, exit fees, minimum interest periods on a bridge. Model the cost of leaving against the saving from the new facility over a realistic holding period, not over the full term of the new loan.
How long it takes, honestly
Six to twelve weeks. The valuation alone is one to three weeks, and automated or desktop routes are not available on commercial security. Many commercial lenders run a credit committee that meets on a schedule rather than on demand. The item most often forgotten is the outgoing lender's redemption statement, which should be requested at the outset. Test a deadline against the process →
When the bridge is running out
If a bridging or development facility is inside its last two months, a term refinance will not land in time on its own. The structure is a re bridge to buy the time, with the term facility arranged properly behind it. That costs a fee. Paying a default rate for three months costs more.
Refinancing a portfolio rather than a building
Where several assets sit on separate facilities, a single portfolio refinance can simplify the structure, release equity across the whole, and reprice everything at once. It is valued as a portfolio, which carries its own considerations. Portfolio finance →
Where the assets are residential buy to lets held in a limited company or as a portfolio, the process and the lenders are different again. Limited company buy to let remortgage →
Commercial refinance FAQs
When should I refinance a commercial mortgage?
Four triggers cover most cases. A fixed rate or margin is ending and the reversion rate is poor. You are paying bridging or development pricing on an asset that is now completed and income producing. You want to release equity for the next purchase. Or the lender's appetite has changed and it wants you gone. Each of these is a different conversation with the market, and the first two usually produce the largest savings.
Can I release equity by refinancing commercial property?
Yes. A capital raise refinance replaces the existing loan with a larger one against the current valuation, and the difference is released to you for any legitimate business purpose, most commonly the deposit on the next asset. The lender will size the new loan on its valuation and on the income cover, and both have to support the larger figure.
How long does a commercial refinance take?
Six to twelve weeks. A full valuation with an internal inspection takes one to three weeks, and many commercial lenders run credit committees on a schedule. The item most often forgotten is the outgoing lender's redemption process, which should be started at the outset rather than once terms are agreed. Where a deadline is genuinely short, a bridge now with the term facility arranged behind it is the usual structure.
Will I have to pay early repayment charges?
If you are inside a fixed rate period, usually yes, and the charge should be modelled against the saving before you proceed. If you are on a variable margin or past the fixed period, usually not, though some facilities carry an exit fee. On a bridge or development facility being refinanced at term end there is usually no penalty, but check the minimum interest period.
What does the lender look at on a refinance?
The valuation, the income and you. For investment property, the tenant covenant, the unexpired lease term, the rent against the market and the interest cover it produces. For owner occupied premises, the trading accounts and the affordability of the new payment. And the basis of value, because a lender sizing on a 180 day figure rather than market value will offer a smaller loan on the same building.
Can I refinance from a bridging loan onto a commercial mortgage?
Yes, and it is one of the most common refinances we arrange. The bridge is repaid from the term facility, which is sized on the completed, let or trading asset. The critical point is timing: the term lender's process takes six to twelve weeks, so it needs to start well before the bridge term ends, not when the default rate is already running.