What Are The Current Commercial Mortgage Rates?

Updated January 19, 2019

commercial real estate in california

Commercial property mortgage rates are almost always higher than residential mortgage rates. This is simply because commercial loans have inherently more risk.

Type Of Commercial LoanAverage Loan-To-Value (LTV)Average Current Rate
Conventional Bank Loan70% - 80%3.5% - 8%
SBA 504 Loan80% - 90%4.5% - 5.5%
SBA 7(a) Loan80% - 90%6% - 8.5%
Life Company Loan60% - 75%3.5% - 4.5%
CMBS Loan70% - 75%3.5% - 5.5%
USDA Loan80% - 85%5.5% - 6.5%
Fannie Mae Multifamily Loan70% - 80%4% - 5.5%
Soft Money60% - 65%6.5% - 12%
Commercial Hard Money Loan50% - 55%10% - 21%


Lenders determine today’s commercial mortgage rates using a number of factors including:

LOAN-TO-VALUE – the amount you are borrowing relative to the value of the property

DEBT SERVICE COVERAGE RATIO – your ability to pay the loan each month

RATE SPREAD – the amount your lender charges over the prime rate or a specific interest rate swap.

The best way to find current commercial mortgage rates is to first determine what your commercial lending options are. I have included the following lender/loan type roundup to make your search simpler:

Apply for a commercial property loan



3.75% – 4.75%*

Life insurance companies have historically offered the lowest rates on commercial loans but are often difficult to get. Companies like Prudential and MetLife offer commercial property loans with relatively low rates if you can qualify.

These loan amounts usually have a $5 million minimum and are limited to properties that are less than 20 years old.




3.80% – 5.75%*

Conduit CMBS lenders offer competitive commercial mortgage rates based on comparable “on the run” rates plus a lender specific spread.

CMBS loans offer lower rates and higher leverage than most conventional bank loans. Two of the nation’s largest Conduit Lenders are Deutsche Bank and JPMorgan Securities.



3.70% – 6.00%*

Commercial banks and credit unions offer a wide range of competitive commercial mortgage rates depending upon your property type and the length of your loan.

Funding is provided for non-owner investment properties, 51% owner occupied as well as special purpose commercial properties.

Apply for a commercial property loan


SBA 7(a)  +  SBA 504

4.40% – 6.25%*  /  4.00% – 5.30%*

SBA commercial property loans are set by the Small Business Administration. The SBA establishes a maximum that designated lenders can charge above a specified base rate.

The base rate is normally pegged to the WSJ Prime Rate or the one month LIBOR Rate + a certain percentage.

SBA 7 (a) loans are variable rate instruments and currently carry a maximum rate spread of 2.75%.

SBA 504 loans are fixed rate instruments with rates that are determined by monthly debenture bond sales.



5.70% – 6.50%*

USDA Business and Industry loans are partially-guaranteed by the Federal Government and designed to promote job growth in rural areas.

Variable and fixed rates are available at similar interest rates to the SBA loan program.

USDA loans offer loan maximums up to $25 million along with the ability to finance non-owner occupied commercial properties.



6.50% – 18.00%*

Soft money commercial real estate loans act as a hybrid between traditional and hard money loans.

Soft money lenders normally provide lower rates and longer terms (6 months to 5 years) than hard money funding sources.

These lenders also provide a wider range of financing terms since they are normally funded by private investors.



10.00% – 21.00%*

Commercial hard money loans have the highest interest rates of all available commercial loan types. These are usually interest only loans that range from 3 to 18 months.

Normally used  for short term financing needs that require a quick closing.

Origination fees can be quite high, ranging anywhere from 2 to 10 points, depending upon your financial situation and loan-to-value.

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Commercial Mortgage Rates Infographic from WHISTA

*The above rates should only be used as a guide to get a quick overview of current commercial mortgage interest rates. Rates are subject to daily changes and vary greatly with different lenders and borrower types.




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