Refinance the asset — and release the equity it has gained.
Move an existing commercial mortgage to a better-priced lender, reset the tenure, and draw out the appreciation the property has accumulated since the original valuation — in one transaction.
Refinance versus reappraisal — and why you usually want both
A pure refinance replaces your existing loan with a cheaper one. A reappraisal revalues the property at today's price and lends against the higher figure, releasing cash. Done together in a single transaction, you pay one set of legal, valuation and stamp costs instead of two.
The arithmetic is usually decided by three numbers: the rate differential, the residual tenure, and the exit cost from your current lender. A 100 basis point saving on a ₹5 Cr facility with twelve years left is worth several tens of lakhs in interest — enough to absorb foreclosure charges and fresh stamp duty comfortably. The same differential with three years remaining rarely justifies the exercise.
On floating-rate loans to individuals and to micro and small enterprises, RBI's rules restrict prepayment penalties, and for MSE borrowers the position has been tightened further from 2026. Companies and larger borrowers on fixed-rate facilities can still face meaningful exit charges, so read the sanction letter before assuming the switch is free.
Indicative pricing in 2026
A seasoned, cleanly-serviced commercial loan is a low-risk file for an incoming lender, which is why refinance pricing sits at the sharp end of the market.
Public Sector Banks
Tier-1 Private Banks
NBFCs & HFCs
Reading a refinance offer properly
Compare the spread, not the headline rate
A quote of "repo plus 2.60%" tells you what happens when policy rates move. A flat headline number does not. Two lenders quoting the same rate today can diverge by 75 basis points within a year if their spreads differ, so always ask for the benchmark and the spread separately.
Tenure resets can disguise a worse deal
Stretching a facility with nine years left back out to fifteen drops the EMI and looks like a saving, while quietly increasing total interest paid. If cash flow relief is the goal, that is a legitimate choice — but make it knowingly, with the total-interest figure in front of you.
Time the switch around the reappraisal
If the property has appreciated materially, refinancing without revaluing wastes the opportunity. The incoming lender is commissioning a fresh valuation anyway; the marginal cost of taking the higher limit is close to nothing.
Documents required
Incomplete files cause most multi-week delays. We assemble the full set upfront, in the order credit teams read it.
KYC & constitution
- PAN & Aadhaar of all promoters / partners / directors
- Certificate of incorporation, MOA-AOA or partnership deed
- Board resolution or partners' authority letter
- GST registration & trade licence
Financials
- 3 years ITR with computation of income
- Audited balance sheet, P&L and schedules
- 12 months' bank statements of all operating accounts
- GST returns (GSTR-3B) for the last 12 months
- Existing loan sanction letters & repayment track record
Existing loan & property
- Current sanction letter & loan agreement
- Statement of account and repayment track for 12–24 months
- Foreclosure quote / list of documents held by the existing lender
- Original property papers, EC and latest tax receipts
- Latest valuation report if available
How a switch actually runs
Savings model
We compute the total-interest saving net of foreclosure charge, fresh stamp duty and processing fee, and tell you plainly whether it is worth doing.
Fresh valuation & sanction
The incoming lender values the property at today's price, so the new limit reflects appreciation rather than the old number.
Takeover coordination
Foreclosure letter, list of documents, and the handover of original title deeds are sequenced between the two lenders — the part borrowers find most painful alone.
Disbursal & charge transfer
Outgoing loan settled directly, new mortgage registered, old charge released on record and at CERSAI.
Related facilities & deep-dive guides
Every facility below is placed through the same 80+ lender panel. The long-form guides carry the working numbers, worked examples and lender-by-lender detail.
Frequently Asked Questions
The questions our advisory desk is asked most often about Commercial Property Refinance.
Broadly, when the rate differential is 75 basis points or more and at least five years of tenure remain. That combination usually generates enough interest saving to absorb foreclosure charges, fresh stamp duty and processing fees with a clear net gain.
It also makes sense when the property has appreciated and you want the equity out, even if the rate saving alone would be marginal.
Yes. The incoming lender takes a fresh registered mortgage, and state stamp duty applies on the new loan amount. On a large facility this is the single biggest cost of switching.
It is precisely why we model the whole thing before you commit — a switch that looks obviously good on rate alone sometimes does not survive the duty calculation.
It depends on the borrower and the loan type. On floating-rate facilities to individuals and to micro and small enterprises, RBI restricts prepayment charges, and the protection for MSE borrowers was strengthened with effect from 2026.
Companies, larger borrowers and fixed-rate facilities can still attract charges of up to around 2–3% of the outstanding. Check your own sanction letter, and ask for the foreclosure quote in writing.
Yes, and this is the main reason to do the two together. The incoming lender values the property afresh and can lend up to its LTV on the current value, so the difference between the new limit and your existing outstanding comes to you as cash.
The additional amount is still tested against your cash flow, so a strong DSCR matters as much as the valuation.
Eighteen to thirty days is typical once documents are complete. The two lenders are coordinated so that settlement and the new disbursal align, and you should not end up servicing both.
Keep paying your existing EMIs on schedule until the settlement is confirmed. A missed instalment mid-takeover damages the very conduct record the new lender is relying on.
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