RATES BY LOAN TYPE
What You’ll Pay by Program
Each CRE loan type is priced differently because of the underlying risk, funding source, and structure. Here are the typical ranges for each program as of September 2026.
Agency (Fannie/Freddie)
SBA 504 (CDC)
CMBS / Conduit
Conventional Bank
DSCR Loan
Bridge Loan
Hard Money
How these ranges are set: each index-priced program is its benchmark plus the spread that lender type typically charges. Benchmarks as of September 2026: 10-yr Treasury 5.18%, 5-yr Treasury 5.03%, Prime 7%, SOFR 3.88%. Hard money and mezzanine are priced on the deal, not an index.
Sources: benchmarks from FRED (Federal Reserve Bank of St. Louis). SBA 504 debenture pricing (10-year debenture on the 5-year Treasury, 20- and 25-year debentures on the 10-year Treasury): NADCO, 504 Funding Process (2024).
THE MATH
How Each Rate Is Built: Benchmark + Spread
Most commercial loan rates are a market benchmark plus a lender spread. The benchmark moves every day with the bond market; the spread reflects the loan’s risk and the lender’s cost. Benchmarks below are from September 2026: 10-year Treasury 5.18%, 5-year Treasury 5.03%, SOFR 3.88%, Prime 7%.
| Program | Benchmark + spread | Rate range |
|---|---|---|
| Agency multifamily | 10-yr Treasury + 1.1–2% | 6.25–7.25% |
| Life insurance company | 10-yr Treasury + 1.2–1.8% | 6.5–7% |
| SBA 504 (CDC portion) | 10-yr Treasury + 1–2% | 6.25–7.25% |
| CMBS / conduit | 10-yr Treasury + 1.75–2.75% | 7–8% |
| Bank / credit union, 5-year fixed | 5-yr Treasury + 1.5–3% | 6.5–8% |
| DSCR loan | 10-yr Treasury + 1.5–3.5% | 6.75–8.75% |
| SBA 7(a), variable | Prime + 1.5–4.5% | 8.5–11.5% |
| Construction, bank | SOFR + 2.75–4% | 6.75–8% |
| Bridge, bank | SOFR + 2.25–3.25% | 6.25–7.25% |
| Bridge, debt fund | SOFR + 2.75–4.25% | 6.75–8.25% |
Example: a CMBS quote of “Treasuries plus 2%” with the 10-year Treasury at 5.18% means a rate of the Treasury yield plus 2.00 percentage points, inside the 7–8% range above. Ranges are rounded to the nearest 0.25%. Hard money, fix-and-flip, land and mezzanine lenders quote flat rates rather than a benchmark plus spread.
What adds to the spread: higher leverage, lower DSCR, less sponsor experience, a smaller loan, and property types with less predictable income — hotels and single-tenant or special-purpose buildings price above stabilized apartments and industrial.
Typical ranges, updated September 2026. Your terms depend on the property, the borrower and the lender.
WHAT DRIVES YOUR RATE
6 Factors That Determine Your CRE Rate
Market benchmarks set the floor. These six factors determine where YOUR rate falls within each program’s range — and most of them are within your control.
DSCR Strength
A 1.35x DSCR prices better than 1.20x on the same property, because more income covers each dollar of debt service. Lenders price in DSCR tiers, so the gain comes when you cross into the next tier, and each lender sets its own. Use our DSCR Calculator to optimize.
Leverage (LTV)
Lower leverage = lower rate. Lenders price in LTV tiers, so a 60% LTV request usually prices better than 75% on the same property. More equity signals less risk to every lender type.
Property Type
Multifamily and industrial get the best rates. Retail and office carry premiums due to vacancy risk. Hotels and restaurants see the widest spreads. Match your property to the right program.
Sponsor Experience
First-time CRE borrowers usually pay a wider spread than sponsors with a track record. Lenders weigh prior deals, portfolio size, liquidity and net worth.
Loan Size
Within a program, very small loans often price higher because the lender’s fixed costs (underwriting, legal, servicing) are spread across a smaller balance. Size also decides which programs are open to you: CMBS starts around $2M.
Prepayment Structure
Accepting defeasance or yield maintenance (restrictive prepayment) lowers your rate vs. flexible prepayment, because the lender is protected if rates fall. See the Yield Maintenance Calculator for what that protection can cost at payoff.
Model different scenarios: Payment Calculator · Refi Break-Even · Cash-on-Cash Return
Free tools
Run the numbers
The same metrics a lender checks — free, instant, no signup. Each result links straight into an application.
- Commercial Mortgage Calculator Estimate your monthly CRE loan payment, total interest cost, and full amortization schedule. Compare loan structures before you apply.
- DSCR Calculator Calculate your Debt Service Coverage Ratio instantly. See if your property qualifies for CRE financing and which loan programs are available to you.
FREQUENTLY ASKED QUESTIONS
CRE Loan Rate FAQ
What is a good interest rate for a commercial real estate loan in 2026?
For stabilized properties with strong borrower profiles: Agency multifamily at 6.25–7.25%, SBA 504 at 6.25–7.25%, CMBS at 7–8%, and conventional bank at 6.5–8%. A non-SBA, non-agency quote near the low end of its range is very competitive.
Are commercial real estate rates expected to drop in 2026?
Nobody can promise that. Fixed CRE rates follow the 10-yr Treasury, which was 5.18% in September 2026; floating loans follow SOFR and Prime. What you can control is the spread: a stronger DSCR, lower leverage and several competing lenders narrow it whatever the benchmark does.
Should I choose a fixed or variable rate on a commercial loan?
Fixed rates — priced off Treasury yields — lock your payment for the term and suit long holds and stabilized properties, usually with a prepayment penalty. Variable rates — priced off SOFR or Prime — start lower or higher depending on the yield curve, move with the market and usually allow cheaper early payoff, which suits bridge, construction and short holds. If you float, ask about a rate cap or a conversion option.
How is a CRE loan rate different from a residential mortgage rate?
CRE loans usually price above a home mortgage because they carry more risk, shorter terms and balloon structures, and the lender underwrites the property’s income as well as the borrower. CRE rates are priced off Treasury yields, SOFR or Prime plus a spread (see the table above), while most home mortgages are priced for sale to Fannie Mae and Freddie Mac.
Can I lock my CRE rate before closing?
Most CRE lenders don’t offer rate locks at term sheet stage. Rates are typically locked at commitment or application, after appraisal and preliminary underwriting. Some CMBS and agency lenders offer an early rate lock for a fee or a refundable deposit; ask what you lose if the loan does not close. SBA 504 debenture rates are set at pooling, not at application.
Why is my quoted rate higher than the ranges shown here?
The ranges here are typical for stabilized properties and solid borrowers. Your rate may be higher due to lower DSCR, higher leverage, less experience, property condition issues, or challenging markets. Our advisors identify the specific factors raising your rate and recommend strategies to improve it.
How many lender quotes should I get?
At minimum, 3–5 quotes from different lender types. A bank, a CMBS conduit, and an SBA lender will quote the same deal very differently. BestLoanUSA compares options across our 30+ lender network so you see the full landscape without multiple applications.
Related on BestLoanUSA
Related financing
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- What Is a CRE Loan? A commercial real estate loan is financing for income-producing or business-use property — offices, retail, industrial, multifamily (5+ units) — underwritten on the property’s cash flow and value as well as the borrower, not a home mortgage. Mezzanine & pref equityCMBS
- Mezzanine Financing Mezzanine financing is second-position debt that sits between the senior mortgage and your equity, secured by a pledge of the ownership interests rather than the property. It lets sponsors reach 75–90% combined leverage on acquisitions, recapitalizations and developments, at about 11–16%. Mezzanine & pref equityLoan-to-value
- Hard Money Takeout A hard money takeout refinance replaces a short-term hard money or bridge loan with a long-term loan once the property is renovated, leased or stabilized. Bank, SBA and DSCR lenders typically lend up to 75% of value at about 6.25–8.75%, compared with 9–13% for hard money. Hard moneyLoan-to-value
Guides & articles
All articles →- The 2026 CRE Maturity Wall: Refinancing a Loan That Comes Due $875 billion of commercial mortgages are scheduled to mature in 2026. How to size the gap when a low-rate loan refinances at today’s rates, and how to close it. Mezzanine & pref equityPrepayment penalty
- Commercial Loan Prepayment Penalties: What Paying Off Early Costs Step-down, yield maintenance, defeasance and SBA prepayment rules explained with worked numbers — and how to time a refinance or sale around the penalty. Prepayment penaltyCMBS
- Bridge Loan vs Hard Money Loan: Cost, Terms and Which Fits Bridge loans and hard money loans are both short-term real estate debt, but differ in lender, cost, leverage and speed. Side-by-side terms and a worked example. Hard moneyLoan-to-value
Glossary
All terms →More calculators
All calculators →- Defeasance Calculator Estimate the total cost of defeasing your CMBS or conduit commercial loan. See the Treasury portfolio cost, transaction fees, and how it compares to yield maintenance. Prepayment penaltyCMBS
- Yield Maintenance Calculator Estimate your prepayment penalty before refinancing or selling. Understand the true cost of exiting your commercial loan early and compare penalty structures. Prepayment penaltyInterest rates
- Debt Yield Calculator Calculate Debt Yield (NOI ÷ Loan Amount) — the metric CMBS and institutional lenders prioritize over DSCR and LTV. Find your maximum loan amount based on target debt yield. CMBSDSCR