Can You Refinance a Trust-Owned Commercial Property?

Why banks decline trust-owned property refinancing

Trust ownership confuses traditional banks. A discretionary trust has multiple beneficiaries with changing interests. A unit trust has complex equity structures. A family trust might have future distributions that don't show on current documents. Banks view all of this as uncertainty and decline. Rather than underwriting the property value (which is straightforward), banks reject the deal due to perceived complexity around ownership and authority.

How specialist lenders assess trust-owned property

Private lenders focus on the underlying property value and the trustee's authority to refinance.

Property asset value — They separate the property value from the trust structure. A $2M building is worth $2M, regardless of who owns it.
Trustee authority — They verify that the trustee has legal power to refinance under the trust deed and any relevant beneficiary resolutions.
Trust stability — They confirm the trust is stable and will remain operational (no immediate wind-up or disputes evident).

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What a typical trust-owned property refinance looks like

Illustrative example — not a real case

A family discretionary trust owned a small retail building in Melbourne valued at $950K. The current mortgage was $520K at 6.5% with 7 years remaining. The trustee (a corporate trustee entity, so the trust itself could borrow without triggering beneficiary concerns) applied to three banks for refinancing. Banks declined, asking for numerous beneficiary resolutions and questioning whether the trust would dissolve before the loan matured. A specialist lender requested only the trust deed, a board resolution from the corporate trustee authorising refinancing, and a current property valuation. They approved a refinance of $700K at 5.2% for a 15-year term. The trustee released $180K of equity for trust reinvestment, and monthly payments fell from $3,100 to $2,950.

Typical trust-owned commercial refinance

Property type

Commercial real estate held in trust

Loan sizes

$50K–$80M

LVR range

Up to 85%

Interest rates

4.40–30%

Loan term

1–360 months

Settlement

1–5 business days

Ranges shown are across our full panel of specialist lenders. Your deal may fall within a narrower range depending on the specifics.

What lenders want to see

Copy of the trust deed (current version).
Board resolution (if a corporate trustee) or written authority from the individual trustee approving the refinance.
Letter from the trust's accountant confirming the trust is in good standing.
Current property valuation (less than 12 months old) and proof of current ownership.

When this might not work

Trust-owned property refinancing may not work if: (1) there are active disputes among beneficiaries, (2) the trust deed prohibits refinancing, (3) the trust is scheduled for wind-up within the loan term, or (4) the trustee lacks clear authority to borrow.

What our panel can offer for this scenario

Assessment focused on the property and deal, not your credit score
Faster approval and settlement than traditional lenders
Flexibility to work with complex ownership or property types
No requirement to refinance your first mortgage simultaneously

The exact lender and terms depend on your specific deal. Describe your situation and our AI will match you with the most suitable lenders.

How to get started — step by step

Step 1: Describe your situation. Tell us about your property, what you need, and any challenges you're facing.
Step 2: Get matched with lenders. Our AI analyses your details and matches you with specialist lenders most likely to say yes.
Step 3: Review and move forward. Compare options, ask questions, and choose the lender that fits your situation best.

Common questions

Does a family trust need all beneficiaries to agree to refinancing?

Usually not. The trustee (especially a corporate trustee) can refinance without individual beneficiary approval, as long as the trust deed permits it. However, some trusts require a beneficiary resolution — this must be confirmed from the deed.

What if the trust deed doesn't mention refinancing?

Most modern trust deeds give the trustee broad powers to borrow. However, if refinancing is explicitly prohibited, the trustee cannot proceed without amending the trust deed — a legal and costly process.

What is a unit trust, and can it be refinanced?

A unit trust is a structure where units represent shares in the trust assets. Unit trusts can be refinanced if the trustee has power to borrow. The process is similar to a family trust.

Can a trust dissolve while I have an outstanding loan?

This is risky. If the trust dissolves, the lender may require immediate repayment. Most lenders want confirmation the trust will remain operative for the life of the loan.

How is interest tax-deductible on a trust property loan?

Interest paid on trust borrowings is typically deductible against trust income, reducing the taxable income distributed to beneficiaries. This is a tax question — your accountant should advise.