Refinancing a commercial mortgage before it matures

Most commercial mortgages are not thirty-year loans. They are five or ten year notes with a balloon: when the term ends, the balance is due, and the loan either gets refinanced, extended, or the property gets sold.

If your note was written when rates were at their lows, the renewal quote will be higher. On a typical apartment-building loan, the difference between a rate from 2021 and a rate today can move the monthly payment by thousands of dollars, and it can also change how much a new lender will advance against the same building.

Your options at maturity are better the earlier you start.

Six months or more before the date, everything is available: a full refinance shopped across banks, credit unions, and private lenders; a term sheet you can compare against your own bank's renewal; time to fix anything in the file a lender would question.

Ninety days out, most bank processes are tight but workable. Thirty days out, the realistic options are your current bank's extension, at its price, or a bridge loan while a proper refinance is arranged.

What an extension really costs. Extensions feel easy because the paperwork is short. But an extension is priced by the lender you already owe money to, without competition. Sometimes it is genuinely the right answer. The only way to know is to have a market quote next to it.

If you have a note coming due in the next year or two, that is exactly the situation we work on. Send us the basics and we will tell you what the market looks like for your building.