Commercial Real Estate Guide
Current Commercial Loan Rates
A comprehensive overview of today's commercial mortgage rates and lending requirements.
Commercial Mortgage Rates by Property Type
Rates vary by asset class due to different risk profiles, vacancy patterns, and lender appetite.
| Property Type | Typical Rate Premium | Why |
|---|---|---|
| Multifamily (5+ units) | Lowest rates | Strong demand, agency programs available, low default rates |
| Industrial / Warehouse | Low to moderate | Strong fundamentals, net lease structures reduce lender risk |
| Retail (net lease, national tenant) | Moderate | Predictable income, but retail sector headwinds |
| Retail (multi-tenant) | Moderate to high | Vacancy risk, more complex underwriting |
| Office (Class A) | Moderate to high | Remote work impact on occupancy |
| Office (Class B/C) | High | Elevated vacancy risk post-pandemic |
| Self-storage | Moderate | Strong asset class, good historical performance |
| Hospitality | Highest | Revenue volatility, operational complexity |
| Mixed-use | Moderate | Complexity premium, lender-specific |
What Determines Your Commercial Mortgage Rate
Your actual rate depends on several factors beyond the base market rate:
Loan to Value (LTV)
Lower LTV means lower risk for the lender — typically rewarded with a lower rate. Bringing more equity to a deal can meaningfully reduce your rate.
DSCR
A higher debt service coverage ratio signals a safer loan. Strong DSCR (1.50x+) often qualifies for better pricing. Use our DSCR calculator to check your ratio before shopping lenders.
Property type and condition
Class A stabilized assets in primary markets get the best rates. Transitional or value-add properties typically need bridge financing at higher rates until they stabilize.
Loan size
Larger loans ($5M+) access CMBS and life insurance company programs with competitive pricing. Smaller loans under $1M often carry a small premium.
Borrower experience and strength
Experienced sponsors with a track record of similar deals get better terms. First-time commercial borrowers may pay a small premium or need a stronger personal financial statement.
Benchmark rate
Most commercial loans are priced as a spread over the 10-year US Treasury or SOFR. As these benchmarks move, so do commercial rates. Lock your rate as soon as you have a confirmed deal.
How to Get the Best Commercial Mortgage Rate
- Shop multiple lenders. Get term sheets from at least three lenders — a local bank, a national lender, and a broker who accesses CMBS or life company programs. Rates vary more than most borrowers expect.
- Improve your DSCR before applying. If your current NOI produces a DSCR just above 1.25x, consider strategies to increase NOI before applying. Even a small NOI improvement can push you into a better pricing tier.
- Reduce LTV if possible. Bringing the LTV below 65% often unlocks meaningfully better pricing, especially with life insurance company lenders.
- Use a commercial mortgage broker. For deals over $2M, a commercial mortgage broker has access to lenders you cannot reach directly and negotiates on your behalf. Typical broker fee is 0.5% – 1% of the loan amount, often paid by the lender.
- Lock rate strategically. Rates can move significantly between application and closing. Understand the lock options available and the cost of extending a lock if closing is delayed.
Run Your Numbers
Commercial Mortgage Calculator
Know your property's NOI? Calculate your monthly payment, annual debt service, and LTV at current rates. → Use the Free Commercial Mortgage Calculator
DSCR Calculator
Check whether your deal passes standard commercial lender debt service coverage ratio underwriting thresholds. → Use the Free DSCR Calculator
Debt Yield Calculator
Verify whether your property's debt yield meets commercial lender minimum rules for your loan amount. → Use the Free Debt Yield Calculator
Frequently Asked Questions
What are current commercial mortgage rates in 2026?
Commercial mortgage rates in 2026 range from approximately 6.00% for agency multifamily programs to 9.00%+ for conventional investment property loans. Bridge and hard money lenders charge 9% – 14%. Rates change frequently — the table above reflects current market conditions as of May 2026.
Are commercial mortgage rates higher than residential?
Yes. Commercial mortgage rates are typically 1% – 3% higher than comparable residential rates. The higher rates reflect greater loan complexity, larger loan sizes, and property income risk rather than borrower income risk.
How often do commercial loan rates change?
Commercial rates move with benchmark rates — primarily the 10-year US Treasury and SOFR. They can change daily in volatile markets. For deals in progress, lock your rate as soon as possible after receiving a term sheet.
What is the best loan type for an investment property?
It depends on the property. For multifamily (5+ units), Fannie Mae or Freddie Mac agency loans offer the best rates and terms. For other commercial properties, CMBS loans are best for larger stabilized deals. SBA 504 is best for owner-occupied commercial. Conventional bank loans offer the most flexibility for smaller or transitional deals.
Can I get a commercial mortgage with 10% down?
Generally no for investment properties — conventional lenders require 25% – 35% down. The exception is SBA 504 loans for owner-occupied commercial real estate, which allow as little as 10% down.
Rates are approximate market ranges as of May 2026 and are subject to change without notice. Actual rates depend on borrower qualifications, property type, location, LTV, and lender. Not a commitment to lend. Consult a licensed commercial mortgage broker for current rates specific to your transaction.
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