What Are Today’s Commercial Loan Rates?
Remember that all quotes for commercial loans are based on a number of underwriting criteria, such as the location of the property and the borrower, loan-to-value (LTV), debt service coverage ratio (DSCR), type of property, owner-occupied or investment, and borrower’s financial stability. The interest rates listed below are indicative only for primary market properties with strong and knowledgeable sponsors and respectable LTVs and DSCRs. However, because we have so many different loan options available, the actual interest rates could differ from those indicated below.
Rates By Loan Type
Conventional mortgages are loans provided by banks and credit unions that are FDIC-insured. Usually, they need a personal guarantee and an underwriting of the guarantors’ entire worldwide cash flow, which includes their business and personal tax returns. You can use this loan product for owner-occupied or investment properties.
| Term | Fixed Rate | Floating Rate | Max LTV* | Max Amortization** |
|---|---|---|---|---|
| 3 Years | 6.22% – 8.22% | 5.87% – 10.50% | 85% – Owner-Occupied / 75% – Investment | 30 Years |
| 5 Years | 5.99% – 7.99% | 5.87% – 10.50% | 85% – Owner-Occupied / 75% – Investment | 30 Years |
| 7 Years | 5.96% – 7.96% | 6.37% – 10.50% | 85% – Owner-Occupied / 75% – Investment | 30 Years |
| 10 Years | 5.88% – 7.88% | 6.87% – 10.50% | 85% – Owner-Occupied / 75% – Investment | 30 Years |
| 15 Years | 6.38% – 8.88% | 6.87% – 10.50% | 85% – Owner-Occupied / 75% – Investment | 15 Years |
$1,000,000 in loan amount; * not available for all properties in all markets; ** priced according to each transaction
Private Banking Mortgage Rates
Borrowers with significant net worth and liquidity can take advantage of preferred terms and discounted interest rates through private banking. The lender may ask for a depository or a private wealth management relationship with the loan sponsors in order to offer this service.
| Term | Fixed Rate | Floating Rate | Max LTV* | Max Amortization** |
|---|---|---|---|---|
| 3 Years | 6.47% – 7.22% | 5.87% – 10.50% | 85% – Owner-Occupied / 75% – Investment | 30 Years |
| 5 Years | 6.24% – 6.99% | 6.02% – 10.50% | 85% – Owner-Occupied / 75% – Investment | 30 Years |
| 7 Years | 6.21% – 6.96% | 6.17% – 10.50% | 85% – Owner-Occupied / 75% – Investment | 30 Years |
| 10 Years | 6.13% – 6.88% | 6.37% – 10.50% | 85% – Owner-Occupied / 75% – Investment | 30 Years |
| 15 Years | 6.38% – 7.13% | 6.62% – 10.50% | 85% – Owner-Occupied / 75% – Investment | 15 Years |
A $1,000,000 loan amount is available. It is priced per transaction and not available for all properties in all markets. Borrowers must be eligible for the Private Banking relationship program. Principals must have >$3Million liquid assets and >$10Million net worth.
A non-recourse loan offered by a financial institution is known as a CMBS or conduit mortgage. After the loan is closed, it is bundled and bonds backed by the underlying real estate are offered, securitizing the loans. Used only for investment properties.
| Term | Fixed Rate | Floating Rate | Max LTV* | Max Amortization |
|---|---|---|---|---|
| 5 Years | 5.99% – 7.49% | N/A | 75% – Investment | 30 Years |
| 7 Years | 5.96% – 7.46% | N/A | 75% – Investment | 30 Years |
| 10 Years | 5.88% – 7.38% | N/A | 75% – Investment | 30 Years |
SBA 504 Loan Rates
The Small Business Administration guarantees the SBA 504 loan product, which can be used to finance owner-occupied real estate, machinery, and equipment. LTVs can be utilized for newly constructed or already-existing properties, with values up to 90%.
| Term | Fixed Rate – Purchase** | Fixed Rate – Refinance** | Max LTV* | Max Amortization |
|---|---|---|---|---|
| 10 Years | 6.53% | 6.56% | 90% – Owner-Occupied | 10 Years |
| 20 Years | 6.42% | 6.45% | 90% – Owner-Occupied | 20 Years |
| 25 Years | 6.36% | 6.39% | 90% – Owner-Occupied | 25 Years |
$750,000 in loan amount * Not available for all kinds of properties ** SBA debenture rate exclusively
SBA 7a Mortgage Rates
Another loan option offered by the Small Business Administration is SBA 7a, which can be used to finance owner-occupied properties, real estate, machinery, equipment, inventory, and FF LTVs can reach 80% and can be applied to newly constructed or already-existing properties.
| Term | Fixed Rate – Purchase* | Floating Rate – Purchase | Max LTV* | Max Amortization |
|---|---|---|---|---|
| 10 Years | 6.00% – 10.50% | N/A | 85% – Owner-Occupied | 25 Years |
| 20 Years | 6.50% – 10.50% | 6.50% – 11.00% | 85% – Owner-Occupied | 20 Years |
Loan Amount $750,000+ * Not available for all property types
A USDA loan can be utilized for the establishment of working capital, the purchase of machinery or equipment, or the construction or acquisition of commercial real estate. Only eligible rural areas with 50,000 or fewer residents can access it.
| Term | Floating Rate | Fixed Rate** | Max LTV* | Max Amortization* |
|---|---|---|---|---|
| 5 Years | 6.50% – 11.00% | PTB | 80% – Owner-Occupied or Investment | 30 Years |
| 7 Years | 6.80% – 11.20% | PTB | 80% – Owner-Occupied or Investment | 30 Years |
| 10 Years | 7.50% – 11.35% | PTB | 80% – Owner-Occupied or Investment | 30 Years |
| 30 Years | PTB | PTB | 80% – Owner-Occupied or Investment | 30 Years |
$1,000,000–$25,000,000 in loan amount; * not available for all types of properties; ** transaction-by-transaction pricing
(Life Company/LifeCo): The majority of insurance lenders favor newer, high-quality properties at low leverage in major markets and very experienced investors. This product is typically the most competitive and conservative of all of them. This product can be applied to stabilized properties (or under certain conditions, to construction).
| Term | Fixed Rate* | Floating Rate | Max LTV* | Max Amortization* |
|---|---|---|---|---|
| 5 Years | 5.49% – 7.49% | N/A | 70% – Investment | 30 Years |
| 7 Years | 5.46% – 7.46% | N/A | 70% – Investment | 30 Years |
| 10 Years | 5.38% – 7.38% | N/A | 70% – Investment | 30 Years |
| 20-30 Years | 5.64% – 7.89% | N/A | 70% – Investment | 30 Years |
Bridge loans are used to stabilize and/or perform minor repairs on investment properties. These loans usually have higher interest rates and are used for a short period of time (6–36 months) until the property has been completely restored and stabilized. The borrower may pursue one of the other lower-interest loan products listed in this section once the property has stabilized completely.
| Term | Floating Rate | Fixed Rate | Max LTV* | Max Amortization** |
|---|---|---|---|---|
| 6 Months | 6.50% – 12.50% | N/A | 80% – Investment | I/O |
| 12 Months | 7.00% – 13.00% | N/A | 80% – Investment | I/O |
| 24 Months | 7.50% – 13.50% | N/A | 80% – Investment | I/O |
| 36 Months | 8.00% – 14.50% | N/A | 80% – Investment | I/O |
Loan Amount: $1,000,000 * Interest-only; not available for all areas or property types; may compute using LTC rather than LTV
Construction Commercial Loan Rates
Construction loans are utilized for major property rehabilitation, ground-up construction, or redevelopment. Interest rates vary widely based on the lender, kind of property, market, and type of loan.
| Term | Floating Rate | Fixed Rate* | Max LTV* | Max Amortization** |
|---|---|---|---|---|
| 6 Months | 10.00% – 13.50% | N/A | 75% – Owner-Occupied or Investment | I/O |
| 12 Months | 10.15% – 14.00% | N/A | 75% – Owner-Occupied or Investment | I/O |
| 24 Months | 10.25% – 14.50% | N/A | 75% – Owner-Occupied or Investment | I/O |
| 36 Months | 10.35% – 15.00% | N/A | 75% – Owner-Occupied or Investment | I/O |
$3,000,000 is the loan amount. * Not available for all areas or property types; LTC may be used in place of LTV in calculations. ** Interest-only
When a borrower is unable to obtain a loan-to-value ratio (LTV) high enough to finance a particular piece of commercial real estate, they may place this hybrid security of debt and equity onto a property in a second-lien position, behind another lender known as a “senior secured” lender. It can be applied to the purchase or refinancing of investment real estate.
| Term | Fixed Rate | Floating Rate | Max LTV* | Max Amortization |
|---|---|---|---|---|
| 5 Years | 7.23% – 9.23% | N/A | 75% – Investment | 30 Years |
| 7 Years | 7.52% – 9.52% | N/A | 75% – Investment | 30 Years |
| 10 Years | 7.87% – 9.87% | N/A | 75% – Investment | 30 Years |
Loan Amount: $1,000,000 * Subject to availability for certain property types and locations ** Typically used in tandem with CMBS loans, which are subject to the same underwriting guidelines
Key Market Index Rates
| KEY MARKET INTERESTS | |||
| Index | Rates | ||
| SOFR 30 Day | 5.340% | ||
| SOFR 90 Day | 5.360% | ||
| SOFR 180 Day | 5.390% | ||
| Prime | 8.500% | ||
| 30 Day Libor | 0.000% | ||
| 90 Day Libor | 0.000% | ||
| 6 Month Libor | 0.000% | ||
| 1 Year Swap | 5.654% | ||
| 2 Year Swap | 5.109% | ||
| 3 Year Swap | 4.684% | ||
| 5 Year Swap | 4.226% | ||
| 7 Year Swap | 4.015% | ||
| 10 Year Swap | 3.870% | ||
| 30 Year Swap | 3.485% | ||
| 5 Year Treasury | 3.990% | ||
| 7 Year Treasury | 3.960% | ||
| 10 Year Treasury | 3.880% | ||
| 10 Year SBA 504 Purchase | 6.530% | ||
| 20 Year SBA 504 Purchase | 6.420% | ||
| 25 Year SBA 504 Purchase | 6.360% | ||
| 10 Year SBA 504 Refinance | 6.560% | ||
| 20 Year SBA 504 Refinance | 6.450% | ||
| 25 Year SBA 504 Refinance | 6.390% | ||
Keep Up to Date with the Latest Index Rates
Keep track of the rates for Libor, Prime, Swap, and Treasury notes, and receive push notifications, emails, or texts when the rates change from a predetermined value to another.
Private investment firms provide hard money loans to finance properties that aren’t “bankable” for a variety of reasons, including problems with the borrower’s credit or other property-related concerns. We don’t recommend using this product unless the borrower has significant experience with this type of loan and can refinance or sell the property within a short period of time due to the extremely high interest rates, which are typically around 12%.
Experienced investors with properties in primary or secondary markets are eligible for Fannie Mae’s non-recourse multifamily loan product; tertiary markets are only considered as an exception and require a waiver. Click here for apartment loan rates.
Another non-recourse multifamily loan option available to seasoned investors with holdings in significant markets is Freddie Mac. The available structures for its small balance loan program are the primary distinction between this product and Fannie Mae. e. hybrid, step-down prepayment penalties). Click here for apartment loan rates.
Department of Housing and Urban Development (HUD) of the Federal Housing Authority is the federal agency that guarantees FHA, a non-recourse mortgage product. It can be applied to multifamily buildings and different healthcare facilities, including hospitals and assisted living communities. Click here for apartment loan rates.
What Types of Properties Qualify for a Commercial Loan?
A property must be zoned properly for either business/commercial or multifamily use in order to be eligible for a commercial loan. This would include the following types of buildings:
- Office
- Retail
- Apartments (5+ units)
- Industrial/Warehouse
- Mixed Use (a combination of any of the above properties)
- Self Storage
- Hospitality (Hotel/Motel)
- Specialty Use: Any property that can only be utilized for a particular kind of business or function, such as car washes, churches, auto repair shops, or hospitals.
What is the Difference Between Residential and Commercial Interest Rates?
Residential properties (i. e. Compared to commercial properties, single-family homes with four units or fewer typically have substantially lower available interest rates. Furthermore, on a residential loan, the term and amortization usually coincide (i e. While a commercial loan’s term is typically shorter than the amortization (30/30), e. 7/25), forcing the borrower to sell the property or refinance in order to pay off the loan by the deadline.
How Are Interest Rates Calculated?
The internal cost of funds for the lender determines how commercial interest rates are computed. But the most typical method used by lenders to determine an interest rate is to take an index (i.e. e. LIBOR, treasury, swaps, FHLB, etc. ) and increasing that index by a “spread,” which represents the profit the lender receives from the loan. For example, if the lender is pricing at LIBOR, which is at zero right now, 000 + 2. 00%), your interest rate would be 2%.
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| Interest Rate | |
| Loan Payment Calculator | |
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| Interest Only | |
| Difference | |
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Focusing on small, mid-size, and large balance commercial loans as well as multifamily loans, Commercial Loan Direct is a business division of CLD Financial, LLC, one of the top national commercial correspondent lenders. CLD has an A rating from the Better Business Bureau (BBB) and is a member of the National Mortgage Bankers Association and the Georgia Lenders Quality Circle. ).
Note: This website’s commercial mortgage rates should only be used as a reference and do not imply a loan offer. Any errors in data entry that could affect the displayed commercial loan rates are not the responsibility of Commercial Loan Direct or CLD Financial, LLC. Rates for commercial loans are subject to fluctuate without prior notice.
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© 2020 Commercial Loan Direct (“CLD”) is a nationwide mortgage banking and commercial real estate correspondent company that offers more than 200 programs. It is a business division of CLD Financial. CLD collaborates with a range of financial institutions and government-sponsored agency lending platforms to offer our clients a comprehensive range of financial products that can be customized to meet their unique requirements.
Types Of Commercial Loans
Use our loan finder to find a commercial loan that meets your needs. We offer loans for the following types of properties: churches, self-storage, hotels, mixed-use, multifamily, offices, retail, industrial, hospitals, and healthcare facilities. We provide financing in all 50 states. Please be aware that we are only authorized to work on commercially zoned properties.
FAQ
What is a reasonable interest rate for a business loan?
Business lines of credit 3% to 20%400% Online loans Average interest rates Business loans 49% to 60. 9%Merchant cash advances1. 2 to 1. 5 factor rateInvoice factoring1% to 6% factor rate.
What is the interest rate on commercial loans?
|
Multifamily
|
5 Year
|
10 Year
|
|
BANK
|
6.92%
|
6.78%
|
|
AGENCY
|
5.58%
|
5.66%
|
|
AGENCY SBL
|
6.64%
|
6.64%
|
|
CMBS
|
7.32%
|
6.97%
|
What is the prime rate of a commercial loan?
The best interest rate available for loans on the market is referred to as the prime rate for a commercial loan. Since the prime rate serves as a benchmark for other financial services like credit cards and credit lines, it is typically on the lower end. The current prime rate is seven percent of the loan’s interest rate.
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