Refinancing a commercial mortgage in New Zealand means swapping your existing facility for a new one — a different lender, a different rate, or both — while the same property stays as security. It's not a new marriage. It's the same one, renegotiated — same address, better terms, no need to redo the vows. Borrowers usually come to us for one of three reasons: the current facility's expiring, the rate's crept up since drawdown, or there's equity sitting in the property that could be doing something more useful. Long-term non-bank refinancing runs $300,000 to $5,000,000+, at up to 70% LVR on commercial security — a little more room, up to 80%, on residential security behind the same facility. It isn't automatically the right move. Sometimes staying put costs less than switching. But when it pays off, it tends to pay off by a wide margin.
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What Refinancing a Commercial Mortgage Actually Means
Two products can sit underneath a refinance, and which one applies depends on what you're refinancing into, not just what you're refinancing out of.
Refinancing out of a short-term facility (3–24 months, usually interest-only, repaid in one lump sum at exit) is often just the exit itself — you refinance onto a long-term facility instead of selling. Refinancing a long-term facility (20–30 years, serviced monthly) usually means moving lenders for a better rate, structure, or LVR, not changing the type of loan.
Either way, the new lender pays out the old one directly at settlement. You're not holding two facilities at once, and you're not funding anything out of pocket unless there's a shortfall the new facility doesn't cover. For the full breakdown of loan sizes, terms, and interest structures on each product, see our property finance page — this post is specifically about the refinance decision.
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When Refinancing Actually Makes Sense
Four situations come up again and again.
- The current facility is expiring. Short-term loans are built for 3 to 24 months. If the exit was always meant to be a refinance rather than a sale, this is that moment, not an emergency.
- The rate's moved since drawdown. A lender that priced you sharply two years ago isn't obligated to keep doing it forever — and won't necessarily tell you either.
- There's equity to release. If the property's grown in value or the loan's been paying down, refinancing can free up cash for working capital, another purchase, or a renovation, without selling anything.
- The lender's appetite has changed. A bank that funded the deal in 2022 might not fund the same deal today on the same terms. Policy shifts, and it’s rarely announced in advance.
The Reserve Bank's official cash rate sets the floor every lender prices off, but what you're actually paying moves with your own facility, security, and lender — not the OCR alone. None of these situations need to be urgent to be worth a phone call. The worst outcome of checking is finding out you're already on a good deal.
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How Much Equity You Can Release: LVR on a Refinance
Short answer: up to 70% of the property's current value on commercial security, up to 80% on residential security behind the same facility. The number that matters is a fresh registered valuation, not the value you bought at or the balance on your existing loan.
Equity is the gap between what the property's worth today and what you still owe. That gap can be considerably wider than the original purchase price suggests once a property's grown in value or the loan's paid down for a few years — but the only way to know the real figure is to order the valuation, not estimate off the council's capital value.
This is where being specific before the first call pays off. A borrower who says "my valuation's come in and I need 65% LVR to release equity for the next purchase" gets a term sheet faster than one who says "how much could I get."
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What You Need to Refinance a Commercial Mortgage
Refinancing needs one document a fresh purchase doesn't: your existing loan agreement.
- The existing facility. Your current loan agreement or statement, so we know the payout figure and whether there’s a break cost to plan around.
- The valuation. A fresh registered valuation — lenders price a refinance off today’s value, not the figure on your original purchase agreement.
- The numbers. Your financial position, and — for a long-term facility — evidence you can service the new monthly repayment.
- The reason. Why you’re refinancing — a better rate, releasing equity, or an expiring facility — shapes which lender’s policy actually fits.
Get these four sorted before the first call and a term sheet can turn around in 24–48 hours, same as any other facility. Miss the existing loan agreement specifically, and the file doesn't die — it just stalls on a payout figure nobody can confirm yet.
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What Refinancing Actually Costs
Two different costs get lumped together here, and they're not the same conversation. A break cost bigger than the rate saving is the finance version of paying a cancellation fee to leave a subscription you'd already stopped using — technically free of it, worse off for the trouble.
The first is what your existing lender might charge you to leave early — a break cost, calculated off your current loan agreement, not something anyone can quote you in a blog post. Ask an advisor how break costs are worked out and watch them find something fascinating to look at on the floor. (I'll spare you the full formula. Call your existing lender and ask directly — it's the only honest number, and it's theirs to give, not mine to guess.)
The second is what refinancing through us costs. In the typical scenario, the lender pays our fee once the new facility settles — not you. If a deal genuinely doesn't attract a lender-paid commission, we'll say so upfront and agree a fee with you before any work starts, not after. If an advisor won't tell you plainly who's paying them before you sign anything, that's the question to ask before any other. Someone's always paying for "free advice," and it's worth knowing who.
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When Refinancing Isn't the Right Move
Worth ruling these out before spending two weeks finding out the hard way.
- The break cost outweighs the saving. If leaving your current facility early costs more than the new rate saves you over its term, refinancing is a paper win, not a real one. Run the numbers before you run the application.
- You need a residential mortgage. Refinancing your own home is residential lending, not commercial. A bank or a mortgage advisor is the right call, not us.
- There's not enough equity to make it worth it. Below a certain LVR gap, the cost of arranging a new facility can eat most of what refinancing was meant to free up. Sometimes the answer is 'wait for the next valuation,' not 'refinance now.'
None of this is written to talk you out of calling — it's written so the first call is about your actual numbers, not a fishing trip. If your facility still has time on it and just needs restructuring rather than replacing, our long-term finance page covers what that facility looks like end to end, and short-term finance covers the 3–24 month bridge end of this. For general guidance on funding a growing business, business.govt.nz is a solid starting point too.
A commercial mortgage refinance in NZ isn't complicated once someone's walked you through the actual numbers — valuation, LVR, and the real cost of leaving your current facility, not a generic rate comparison. We hold relationships across 20 banks and non-bank lenders — seven banks, thirteen non-bank — so if the file needs an appetite your current lender doesn't have, there's somewhere else to put it. An indicative term sheet still comes back in 24–48 hours, and settlement can follow in as little as 72. Refinancing doesn't happen by accident, and neither does a lender saying yes twice in a row. Give us a call before your existing facility's expiry date does the deciding for you. You can check any advisor's licensing on the Financial Service Providers Register — ours is FSP 714331.