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Most borrowers shopping commercial real estate loan rates ask the wrong question first. “What’s the rate?” sounds reasonable until you realize that a 6.0% bank quote and an 8.5% bridge quote on the same property aren’t comparable — they’re priced for different deals, different timelines, and different sponsor profiles. The bank rate looks better on the term sheet. The bridge rate may be the one that actually closes the deal and lets you refinance into a 5.5% permanent loan eighteen months later.
This guide is the borrower-side answer to “what are commercial real estate loan rates today, and what should I actually be looking at.” It covers the current rate ranges across every major lender category, the math that produces each quote, and the seven underwriting levers that determine where your specific rate lands inside the range. It also names — directly — the levers you can pull to get a better rate, and the ones you can’t.
Refreshed quarterly. Last updated: May 2026.
Current Commercial Real Estate Loan Rates — At a Glance
As of May 2026, commercial real estate loan rates across the major lender categories sit in the following ranges:
| Lender Type | Rate Range | Term | LTV | Speed |
|---|---|---|---|---|
| Life Insurance Companies | 5.2% – 6.4% | 5–25 yr | 55–65% | 60–90 days |
| Agency (Fannie/Freddie/HUD) | 5.4% – 6.4% | 5–30 yr | up to 80% | 60 days–12 mo |
| Commercial Banks | 6.0% – 7.5% | 5–25 yr | 65–75% | 60–90 days |
| Credit Unions | 6.0% – 7.5% | 5–25 yr | 65–80% | 45–75 days |
| CMBS Conduit | 6.2% – 7.4% | 5–10 yr | 65–75% | 45–75 days |
| SBA 504 (blended) | 5.5% – 7.0% | 25 yr fixed CDC piece | up to 90% | 60–120 days |
| Debt Funds / Mortgage REITs | 7.0% – 9.5% (FL) | 3–5 yr | 65–75% | 30–60 days |
| Bridge / Hard Money | 8.0% – 14.0% | 6–36 mo | 65–80% | 14–45 days |
These ranges shifted modestly across Q1 2026. The Federal Reserve cut the federal funds rate twice in late 2025 (to a target range of 3.75% to 4.00%), and the Federal Reserve’s policy framework has held that range steady through Q1 and Q2 2026. CRE rates moved less than the Fed cuts implied, because commercial mortgage spreads above the Treasury / SOFR benchmark widened in tandem with rate cuts as lenders priced in lingering credit risk.
For a current-month snapshot updated more frequently than this guide, see commercial mortgage rates today.
How Commercial Mortgage Rates Are Built — The Index + Spread Model
Every commercial mortgage rate is two numbers added together: a benchmark index, plus a spread the lender charges to compensate for risk and capital cost.
Fixed-rate loans (banks, life cos, CMBS, agency permanent debt) price as: Treasury yield + lender spread.
- For a 10-year fixed bank loan, the bank looks at the 10-year Treasury yield (currently around 4.3%, per U.S. Treasury Department daily yield curve data), then adds a spread of 175–300 basis points (1.75–3.0%) depending on credit quality.
- For a 5-year fixed life company loan, the lender uses the 5-year Treasury (currently around 4.1%, per U.S. Treasury Department daily yield curve data) plus a 110–230 bp spread.
- For 10-year CMBS, it’s the 10-year Treasury plus 200–310 bp.
Floating-rate loans (debt funds, most bridge lenders) price as: SOFR + lender spread.
- SOFR (the Secured Overnight Financing Rate) currently sits around 4.4% (per data published by the Federal Reserve Bank of New York).
- Debt fund spreads run 250–500 bp, producing all-in floating rates of 7.0% to 9.5%.
- Bridge lender spreads run 350–700 bp depending on collateral quality and sponsor strength.
The spread is the part lenders control. When borrowers complain that “rates haven’t come down with the Fed,” it’s almost always because spreads have widened. In late 2025 and early 2026, commercial mortgage spreads widened by an average of 35–60 basis points even as the underlying Treasury yields softened.
This matters for two reasons:
- Your rate is more about the spread than the index. Index movement is roughly equal for all borrowers. Spread is where the lender makes a decision about your deal.
- Comparing quotes requires looking at the spread, not the all-in rate. A 6.5% bank quote at Treasury + 220 bp and a 6.5% CMBS quote at Treasury + 220 bp aren’t actually the same loan — but they tell you the two lenders see the risk identically.
Rate Ranges by Lender Type
Each lender category prices commercial mortgages with a fundamentally different capital source, which is what produces the rate spreads above. Understanding which category fits your deal is the first and most consequential step in any rate-shopping exercise. For a deeper map of each category, see our breakdown of the eight types of commercial real estate loan companies and the framework on real estate lending companies vs. banks.
Commercial Banks
Banks fund commercial mortgages with depositor money — the cheapest capital in the market — and price accordingly: 6.0% to 7.5% on a 5- to 10-year fixed loan, with origination of 0.5% to 1.0% and minimal points. The trade-off is rigid underwriting, 60–90-day closings, and full or burn-off recourse on most loans below $25M.
Banks compete hardest on stabilized assets at 60–75% LTV where the borrower has an existing depository relationship. A repeat sponsor with a $2M+ deposit relationship at a regional bank can routinely negotiate 25–50 bps off the standard rate sheet.
Life Insurance Companies
Life cos offer the lowest rates available on commercial real estate: 5.2% to 6.4% on 10-year fixed debt with 25–30-year amortization. The catch is that life cos only fund institutional-quality assets at conservative leverage — 55–65% LTV, 1.40x+ DSCR, deal sizes typically $10M+. For trophy multifamily, industrial, and select office assets, life co debt is difficult to beat on rate.
Agency Lenders (Fannie Mae / Freddie Mac / HUD)
Agency execution on stabilized multifamily prices at 5.4% to 6.4% for 10-year fixed debt at up to 80% LTV. Fannie Mae DUS, Freddie Mac Optigo, and HUD 223(f) are the three main programs. HUD 223(f) and 221(d)(4) offer 35–40-year amortization at the lowest rates in the market, but closing timelines run 6–12 months.
CMBS Conduit
CMBS rates: 6.2% to 7.4% on 5/7/10-year fixed, 65–75% LTV, non-recourse with standard bad-boy carve-outs. The structural advantage is true non-recourse leverage; the structural disadvantage is defeasance prepay and rigid servicer relationships post-close. CMBS competes best on stabilized non-multifamily assets at $5M+.
Debt Funds / Mortgage REITs
Debt funds price at SOFR + 250–500 bp, producing all-in floating rates of 7.0% to 9.5% currently. They fund value-add multifamily, transitional office, and lease-up deals where banks won’t lend the proceeds the borrower needs. Closing in 30–60 days, non-recourse with standard carve-outs.
Bridge / Hard Money
Institutional bridge: 8.0% to 11.5%. Hard money: 10.0% to 14.0%. Term: 6–36 months. The premium pays for sub-45-day closings and asset-based underwriting on properties that wouldn’t qualify for permanent debt. For a deeper look, see our guide on hard money lenders for commercial real estate.
SBA 504
Blended rate on owner-occupied SBA 504 deals runs 5.5% to 7.0% depending on the first-mortgage piece. The CDC second mortgage (40% of the loan, backed by an SBA debenture) is fixed at 5.5–6.0% for 25 years. The bank or non-bank first (50% of the loan) prices at conventional rates. 10% down is the structural advantage no other product matches.
Credit Unions
Credit unions match or beat regional bank rates on member relationships: 6.0% to 7.5%, similar structure to bank loans. Credit unions excel at owner-occupied small business CRE and stabilized small-balance multifamily where the member tie creates 25+ bp pricing benefit. Many credit unions also participate in larger deals through Credit Union Service Organizations (CUSOs) like AVANA CUSO.
For the long-window benchmark on these ranges — trailing-12-month averages plus 2022–2026 trends — see average and typical commercial mortgage rates by loan type.
Rate Variation by Property Type
Property type shifts rates by 50–250 basis points within any single lender category, because each property class carries different cash-flow stability and exit-risk profiles. A summary of typical 2026 ranges:
| Property Type | Bank / Life Co | CMBS | Bridge |
|---|---|---|---|
| Multifamily (stabilized) | 5.4% – 6.7% | 6.0% – 7.0% | 8.0% – 10.0% |
| Industrial / Warehouse | 5.8% – 7.0% | 6.2% – 7.2% | 8.5% – 10.5% |
| Medical Office | 6.0% – 7.5% | 6.5% – 7.5% | 9.0% – 11.0% |
| Retail (anchored) | 6.5% – 7.8% | 6.8% – 7.6% | 9.0% – 11.5% |
| Office (Class A, leased) | 6.8% – 8.2% | 7.2% – 8.0% | 10.0% – 12.0% |
| Self-Storage | 6.2% – 7.5% | 6.5% – 7.4% | 9.0% – 11.0% |
| Hospitality | 6.8% – 8.5% | 7.0% – 8.2% | 9.5% – 12.5% |
Multifamily prices tightest because agency execution provides a constant floor. Office prices widest because lender appetite has thinned post-2022 and most office deals now require some bridge financing layer. Hospitality sits at the high end because RevPAR volatility makes lenders more conservative — though AVANA’s hospitality financing and multifamily financing programs both price competitively against these ranges.
For the full property-type breakdown including underwriting rationale, see commercial property interest rates by property type.
How Loan Term Affects Your Rate
Term length is one of the largest single drivers of commercial mortgage rates — but in a way that confuses most borrowers, because commercial loan “term” is not the same as the amortization period.
A typical 10-year fixed commercial mortgage actually has: – A 10-year loan term (when the balloon is due) – A 25- or 30-year amortization (the payment schedule used to calculate monthly payments)
This means your monthly payment is sized as if you have 25 years to pay back the loan, but the entire remaining balance becomes due in year 10. That balloon payment is what forces refinancing or a property sale at maturity.
Rate impact by term length (typical bank quotes, 2026):
| Loan Term | Indicative Rate | Notes |
|---|---|---|
| 5-year fixed | 6.0% – 7.0% | Lowest fixed-rate option; biggest refi risk |
| 7-year fixed | 6.2% – 7.2% | Most common bank quote |
| 10-year fixed | 6.4% – 7.4% | Standard CMBS / life co term |
| 15-year fixed | 6.6% – 7.6% | Less common; modest rate premium |
| 25-year fixed (SBA 504 CDC) | 5.5% – 6.0% | Government-backed; CDC piece only |
The shorter-term loan gets a slightly lower rate but exposes you to refinance risk: if rates have risen 200 bp by year 5, your refi cost-of-capital will be materially higher. The longer-term loan locks in certainty at a small rate premium.
For the full term-vs-amortization breakdown including balloon mechanics and rate-lock implications, see commercial mortgage terms explained: 5, 7, 10, 25-year options.
What Drives Your Specific Rate — Underwriting Levers
Two borrowers can submit the same deal to the same lender and get rate quotes 75 to 200 basis points apart. The difference is the underwriting evaluation. Seven levers consistently move the spread inside any lender category:
1. Loan-to-Value (LTV) — Every 5% LTV reduction below 70% typically buys 10–25 basis points. The cleanest negotiating lever a borrower can pull.
2. Debt Service Coverage Ratio (DSCR) — Strong DSCR (1.40x+) gets the tightest available spreads; minimum DSCR (1.20x) gets stress-tested pricing.
3. Debt Yield — Some lenders (especially CMBS and life cos) underwrite to debt yield as an independent metric. Higher debt yield = lower rate.
4. Sponsor Experience — A repeat sponsor with documented closings in the same asset class will see 10–50 bps better pricing than a first-time sponsor on an identical deal.
5. Property Condition & Age — Newer, well-maintained assets price tighter than older properties with deferred maintenance.
6. Market & Submarket — A primary-market multifamily asset in Dallas or Phoenix will price 25–75 bps inside the same asset in a tertiary market.
7. Lender Relationship / Deposit Tie — At banks, an existing depository relationship typically buys 25–50 basis points. At credit unions, member status drives similar pricing benefit.
For the full diagnostic on each lever — quantified bps impact and what’s actionable for a borrower mid-application — see what determines your commercial mortgage rate: the 7 underwriting levers.
Comparing Rate Quotes — Total Cost of Capital, Not Headline Rate
The single most expensive mistake borrowers make in rate-shopping is choosing the lowest headline rate without modeling the all-in cost. A 6.5% rate with 2 points origination and a 3-year defeasance prepay structure can easily cost more over a 4-year hold than a 7.0% rate with 0.75% origination and an open prepay.
The components of total cost of capital on a commercial mortgage:
- Interest rate (the headline number)
- Origination fees / points (0.5% to 3.0% of loan amount)
- Lender legal (typically $15K–$80K, capped on professionally structured deals)
- Third-party reports — appraisal, environmental Phase I, property condition, survey ($20K–$50K on a $5M deal)
- Title insurance (0.3% to 0.7% of loan amount)
- Prepayment structure — defeasance, yield maintenance, step-down, or open
- Exit fees — some bridge and debt-fund loans charge 0.5–1.0% at refinance or sale
- Reserves and escrows — tax/insurance impounds, replacement reserves, interest reserve on bridge/construction
A full breakdown by lender type is available in our guide to commercial finance mortgage costs.
The right comparison metric is all-in annualized cost of capital over your expected hold period. A 25 bp rate premium that comes with capped lender legal, open prepay, and tighter execution-certainty is almost always a better deal than a low-rate quote with uncapped legal and aggressive prepay structures.
Commercial Property Refinance Rates — When to Pull the Trigger
Refinance rate ranges in 2026 are nearly identical to acquisition rates: lender categories use the same matrices for refis as for purchases. The strategic question is timing, not rate.
For borrowers approaching loan maturity, three refinance windows matter:
- 90–180 days before maturity — best timing for clean refis where the existing loan is performing.
- Inside 90 days — increasingly tight; lenders front-load processing and reserves.
- Post-maturity / forbearance — distressed refinance pricing, often 100–200 bps above standard.
The 2026–2028 commercial real estate “maturity wall” — the wave of loans originated in 2018–2021 coming due — is shaping the refinance market significantly. Borrowers facing maturity in 2026 are competing with peers for lender capacity, and lenders are pricing accordingly. For the full refinance-specific guide, see commercial property refinance rates: when to pull the trigger.
How to Get the Best Rate
The borrower-side levers that consistently move pricing on a commercial mortgage:
1. Parallel quotes from 2–3 lenders. Single-source quoting always costs you 25–75 bps versus a competitive process. Lenders sharpen pencils when they know the deal is being shopped.
2. Bring deposits to a bank quote. A $1M+ depository relationship at a regional bank typically buys 25–50 bps. Larger deposits buy more.
3. Use a broker if the deal is complex. A good commercial mortgage broker shops 5–10 lenders and brings the best execution. The 1% fee is often more than offset by rate savings, especially on first-time-sponsor or specialty-asset deals. See our framework on how to vet a commercial mortgage broker.
4. Strengthen the sponsor profile before applying. A clean personal financial statement, documented track record, and adequate liquidity reserves are all underwriting inputs that move spread.
5. Improve the deal structure. Lower LTV, better DSCR, longer rate-lock window, and a credible exit strategy each move pricing.
6. Match lender type to deal type. Asking a CMBS lender to compete on a 21-day close is asking for the wrong product at any price.
7. Negotiate every fee. Origination is almost always negotiable. Lender legal cap is non-negotiable to have on the term sheet — and once it’s on the term sheet, the dollar figure inside the cap is negotiable.
For the step-by-step framework — including the 60-point sponsor strength scoring used by institutional lenders — see how to get the best commercial mortgage rate in 2026.
When to Lock Your Rate
Rate-lock mechanics differ by lender category. The relevant timing windows:
- Banks — typically lock at application, with a 60-day default lock window. Float-down options exist but rarely used.
- CMBS — lock at term-sheet or commitment. Lock window typically 30–60 days.
- Agency (Fannie/Freddie) — lock at commitment letter. Lock fee 0.25–0.50% refunded at close.
- Life cos — lock at term sheet or commitment. Lock fees match agency.
- Bridge / debt funds — most price floating-rate; rate-lock concept doesn’t apply in the traditional sense.
For the full mechanics and when to extend a lock vs. relock, see when to lock your commercial mortgage rate.
Frequently Asked Questions
The Bottom Line
Commercial real estate loan rates in 2026 sit in defined bands by lender type — from 5.2% on life co debt for trophy assets up to 14% on hard money for transitional deals. The rate you actually get depends less on the market environment than on which lender category fits your deal and how the seven underwriting levers position your specific transaction inside that category’s range.
For most CRE borrowers, the right rate-shopping process runs in this order:
- Define the deal profile (asset type, leverage, hold period, speed required).
- Pick the lender category that fits (don’t ask a life co to close in 30 days).
- Quote in parallel from 2–3 lenders inside the right category.
- Compare on all-in cost over your expected hold, not headline rate.
- Negotiate the spread and the fee structure, not the index.
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