Commercial loans -Are you going to refinance at high % rates?

[Mary Jay]

Interest rates are going up. With commercial loans you have to refinance every 5 years or so. What is your strategy for financing if interest rates are high on a commercial loan and you can not afford to refinance the property you own?

[Kenneth Garrett]

@Mary Jay

When it’s time to refinance you should be refinancing at a lower balance and in 5 years the rent should have gone up.                

Original Loan

100K at 5% at 20 yr amort. = 659                                       

in 5 years the balance is

84500 at 6% = 598

Plus rent should be higher and I understand taxes may be higher as well.  You should not be any worse.

Good Luck