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Current 2026 rates by loan type, property type, and borrower profile. Compare programs and find the best rate for your deal.
Key Takeaways
Commercial mortgage rates in early 2026 reflect a stabilizing interest rate environment. After the Federal Reserve's rate adjustments through 2024-2025, commercial lending rates have settled into predictable ranges across loan types.[1] The table below shows current rate ranges for the most common commercial loan programs.
| Loan Type | Rate Range | Typical Term | Best For |
|---|---|---|---|
| SBA 504 | 6.0% - 7.5% | 10, 20, 25 years | Owner-occupied properties |
| SBA 7(a) | 7.0% - 9.0% | 7, 10, 25 years | Small business acquisitions |
| Conventional Bank | 5.5% - 8.0% | 5 - 10 years | Strong borrowers, low LTV |
| CMBS/Conduit | 5.5% - 7.5% | 5, 7, 10 years | Stabilized assets, $2M+ |
| Agency (Fannie/Freddie) | 5.5% - 7.0% | 5 - 35 years | Multifamily 5+ units |
| DSCR | 7.0% - 9.0% | 30 years (5/1 ARM) | Investors, no income docs |
| Bridge | 8.0% - 13.0% | 6 - 36 months | Value-add, quick close |
| Hard Money | 10.0% - 14.0% | 6 - 24 months | Distressed, low credit |
These ranges represent typical market conditions as of early 2026. Your actual rate will depend on property-specific factors, borrower qualifications, and the competitive landscape among lenders at the time of your application.[3]
$929B
total commercial and multifamily mortgage originations in 2023
Source: Mortgage Bankers Association
6,000+
commercial lenders in Clear House Lending's network
Source: Clear House Lending
$4.7T
total commercial and multifamily mortgage debt outstanding
Source: Federal Reserve
50 states
nationwide coverage for commercial real estate financing
Source: Clear House Lending
Property type is one of the strongest predictors of your commercial mortgage rate. Lenders assess each asset class based on historical default rates, income stability, and liquidation risk. The spread between the safest and riskiest property types can be 3-5 percentage points.[2]
| Property Type | Typical Rate | Max LTV | Risk Tier |
|---|---|---|---|
| Multifamily (5+ units) | 5.5% - 7.0% | 80% | Low |
| Industrial / Warehouse | 6.0% - 7.5% | 75% | Low |
| Self-Storage | 6.0% - 7.5% | 75% | Low-Medium |
| Office | 6.5% - 8.5% | 70% | Medium |
| Retail / Strip Mall | 6.5% - 9.0% | 70% | Medium |
| Hotel / Hospitality | 7.5% - 11.0% | 65% | Medium-High |
| Special Use (Gas Station, Car Wash) | 8.0% - 12.0% | 65% | High |
Multifamily properties benefit from the most favorable rates because agency programs (Fannie Mae and Freddie Mac) create a deep secondary market that reduces lender risk.[4] Industrial properties have also moved into the low-risk tier due to e-commerce driven demand and consistently low vacancy rates.
Five primary factors drive the rate you will be offered. Understanding each one gives you leverage to negotiate better terms and choose the right loan structure for your deal.
LTV is the single biggest rate driver. A lower LTV means less risk for the lender and a lower rate for you. Dropping from 75% LTV to 65% LTV typically saves 0.25-0.50% on your rate. Most commercial lenders cap LTV at 75-80% for stabilized properties.[3]
DSCR measures whether the property generates enough income to cover its debt payments. A DSCR of 1.25x (the property earns $1.25 for every $1 of debt payments) is the typical minimum. Properties with DSCR above 1.40x qualify for the best rates because they demonstrate a comfortable income cushion. Use our free DSCR calculator to check your numbers.
Your personal credit score, net worth, and commercial real estate experience all affect pricing. A 720+ credit score with a track record of successful projects unlocks the best rates. First-time commercial borrowers can expect to pay 0.25-0.75% more than experienced operators.[5]
As shown in the property type table above, asset class significantly impacts your rate. Beyond the property type itself, lenders evaluate occupancy rates, lease terms, tenant quality, deferred maintenance, and market location. A Class A multifamily in a primary market will price very differently from a Class C retail strip in a secondary market.
Shorter fixed-rate periods (3-5 years) typically carry lower rates than longer locks (7-10 years). Interest-only periods can lower your monthly payment but may come with a slight rate premium. Recourse loans (where you personally guarantee the debt) price 0.25-0.50% lower than non-recourse loans.[7]
Securing a competitive rate requires preparation before you approach lenders. These strategies consistently help borrowers save 0.50-1.50% on their commercial mortgage rate.
Every 5% reduction in LTV improves your rate. If you can put 30-35% down instead of 20-25%, you move into a lower risk tier. On a $2M loan, a 0.50% rate improvement saves $10,000 per year in interest.
Before applying, look for ways to increase net operating income: reduce vacancy, raise rents to market, cut operating expenses. A DSCR improvement from 1.20x to 1.35x can drop your rate significantly. Model different scenarios with our commercial mortgage calculator.
Commercial mortgage rates are not standardized. Different lenders have different appetites for your property type, location, and deal size. Getting quotes from 5-10 lenders (or working with a broker who accesses thousands) typically yields 0.25-0.75% savings compared to a single bank quote.[8]
Commercial rate locks typically last 30-90 days and may require a deposit. If you expect rates to rise, lock early. If rates are trending down, a float-down option (available from some lenders) lets you capture a lower rate if the market moves in your favor before closing.
A loan at 6.5% with 1 point of origination and a 1% exit fee may cost more over your hold period than a 7.0% loan with no points and no prepayment penalty. Always calculate total cost of capital for your expected hold period. Read our commercial loan closing costs guide for a full breakdown.
Choosing between fixed and variable rates is one of the most consequential decisions in structuring your commercial mortgage. Each option has clear advantages depending on your strategy.
| Factor | Fixed Rate | Variable Rate |
|---|---|---|
| Starting Rate | Higher | 0.5-1.5% lower |
| Payment Predictability | Locked for full term | Changes with market |
| Prepayment Flexibility | Often has penalties | Usually more flexible |
| Best Hold Period | 5+ years | 1-3 years |
| Rate Cap Protection | Built-in | Must purchase separately |
For most long-term hold strategies, a fixed rate provides the certainty needed to underwrite reliable cash-on-cash returns. For bridge-to-permanent strategies or short-term holds, variable rates offer lower initial costs and easier exit flexibility.
After a period of elevated rates in 2023-2024 driven by Federal Reserve tightening, the commercial mortgage market has stabilized through 2025 and into 2026. The Fed's gradual rate adjustments have brought some relief to borrowers, though rates remain above the historic lows of 2020-2021.[1]
Key trends for 2026 include:
The consensus forecast suggests rates will remain range-bound through 2026, with potential for modest declines in the second half of the year if inflation continues to moderate.[3]
The right loan program depends on your property type, occupancy status, hold period, and financial profile. Here is a quick decision framework:
Not sure which program fits your deal? Use our commercial mortgage calculator to model different scenarios, or get a free quote from our network of 6,000+ lenders.
As of early 2026, average commercial mortgage rates range from 5.5% to 13% depending on the loan type. Conventional bank loans start around 5.5-8%, SBA loans range from 6-9%, DSCR loans from 7-9%, and bridge loans from 8-13%. Your actual rate depends on property type, LTV, credit score, and market conditions.
Yes, commercial mortgage rates are typically 1-3 percentage points higher than residential rates. This is because commercial loans carry more risk due to business income variability, larger loan amounts, and shorter terms. However, commercial loans often allow interest-only periods and have more flexible structures.
A credit score of 700+ will qualify you for the most competitive commercial mortgage rates. Scores of 680-700 are acceptable for most programs but may add 0.25-0.50% to your rate. SBA loans require a minimum of 650-680, while some bridge and DSCR programs accept scores as low as 620 with compensating factors.
To secure the lowest rate: maintain a credit score above 700, keep your LTV under 65%, demonstrate strong property cash flow (DSCR above 1.30x), provide 3+ years of borrower experience, and shop multiple lenders. Working with a commercial mortgage broker who can access 6,000+ lenders typically saves 0.25-0.75% compared to going directly to a single bank.
Yes, rates vary significantly by property type. Multifamily properties typically get the lowest rates (5.5-7%) because they are considered the safest asset class. Office and retail carry higher rates (6.5-9%) due to vacancy risk. Hotels and special-use properties command the highest rates (8-13%) because of their operational complexity and income volatility.
Fixed rates provide payment certainty and are best if you plan to hold the property long-term or rates are expected to rise. Variable rates start lower (typically 0.5-1.5% below fixed) and work well for short holds or if rates are expected to decline. Many borrowers choose a hybrid approach with a fixed period of 3-7 years followed by an adjustable rate.
Selected Interest Rates (H.15). Federal Reserve, February 2026.
https://www.federalreserve.gov/releases/h15/.
U.S. Cap Rate Survey. CBRE, 2025.
https://www.cbre.com/insights/reports/us-cap-rate-survey.
Commercial/Multifamily Mortgage Originations. Mortgage Bankers Association, 2025.
https://www.mba.org/news-and-research/research-and-economics.
Multifamily Apartment Investment Market Index. Freddie Mac, 2025.
https://mf.freddiemac.com/research.
Commercial Real Estate Outlook. National Association of Realtors, 2025.
https://www.nar.realtor/commercial-real-estate-market-insights.
SBA Loan Rates and Fees. SBA, 2026.
https://www.sba.gov/funding-programs/loans.
CMBS Research. Trepp, 2025.
https://www.trepp.com/cmbs.
Commercial Mortgage Rate Trends. Commercial Real Estate Loans, 2025.
https://www.commercialrealestate.loans/commercial-mortgage-rates/.
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