Theoretically speaking, commercial refinancing helps create a strategy that can play a pivotal role in removing debt with the help of a new loan that has a lower interest rate. Commercial property investments increase cash flow and give leverage to a new loan, as lenders consider lending risk free.

Commercial loans are available from a wide variety of sources with a wide range of terms and conditions. Some are secured on assets of one kind or another and some are available on an unsecured basis. As with all forms of finance, you need to know and understand the exact conditions under which the loan is being made available.

One thing to look out for is early repayment penalties. Even if you do have the means to repay the loan early it could cost you extra in terms of a fee or penalty interest. Most loans are covered by the various consumer credit legislations. They now give you "cooling-off" periods and a lot of the somewhat dubious terms and conditions that were previously imposed have been made illegal.

When you borrow money, methods of repayment vary with the type of mortgage. If you have a capital repayment mortgage, your monthly payments are made up. In part, of the interest you pay on the amount borrowed and, in part, repayment of the loan itself (called capital). Unless the interest rate changes, your monthly payments remain the same throughout the period of your mortgage. In the first year of your mortgage, most of your monthly payment is interest on the loan and only a tiny amount is paying off the capital.