Today's Commercial Mortgage Rates


Current Events Affecting Commercial Mortgage Rates

The Federal Reserve's recent decision to hold interest rates steady, despite strong economic figures, has sent ripples through the financial markets. This decision is a delicate balancing act between sustained economic expansion and the need for inflation control and has direct implications for the commercial mortgage market.

The Fed's Stance Amidst Robust Economic Performance:
While the economy has shown robust performance with a 4.9% growth rate in the third quarter, the Fed's steady hand on interest rates indicates a cautious approach to monetary policy. The central bank's patience is a response to the still-high inflation rates, which, although easing, remain above the desired 2% target. The Fed remains poised to continue raising rates in the future if inflation rates do not ease on their own.

Commercial Mortgage Rates: A Delicate Balance:
The Fed's pause in rate hikes suggests a potential leveling off of borrowing costs for commercial real estate investors. For commercial mortgage rates, which often follow the lead of long-term Treasury yields, this could mean a period of relative stability. However, the market has already priced in expectations of future rate hikes, which could keep commercial mortgage rates on an upward trajectory. Analysts expect this period to continue throughout 2024 and do not expect to see any rate decreases until 2025 at the earliest.

Market Sentiment and the Path Forward:
The market's reaction to the Fed's decision has been cautiously optimistic, with some traders betting on the end of the rate-hiking cycle. This sentiment, if premature, could lead to volatility in commercial mortgage rates as the Fed continues to assess economic data and the need for further monetary tightening. However, the recent slowdown in commercial real estate activity will likely remain until investors have a better sense of future market conditions.

Navigating Uncertainty in Commercial Real Estate:
For investors in the commercial real estate market, the current environment demands a strategic approach. While the Fed's decision provides a momentary pause, the underlying economic strength and inflation concerns suggest that future rate hikes are still a possibility. Borrowers may find it advantageous to secure short-term, fixed-rate loans now, while also preparing for potential adjustments in the future. Many borrowers are currently opting for shorter maturities as they expect rates to soften within the next few years.

The Federal Reserve's latest policy decision is a pivotal moment for the commercial mortgage market. While the immediate impact may be a stabilization of rates, the long-term forecast remains uncertain, with economic indicators and the Fed's commitment to inflation control suggesting that rate volatility is still on the horizon. Stakeholders should remain vigilant, ready to adapt to the Fed's monetary policy signals and the broader economic climate. The bottom line is that the market will remain slow until there is more certainty for investors.

We don’t expect the multifamily sector to be affected by these recent closures unless the banking crisis expands and causes other banks to be closed down. These banks were affected by business lending in the tech and cryptocurrency sectors. Multifamily lending for banks has overall been healthy and we don’t expect that to change any time soon. However, we are seeing lending activity slow down as rates have risen due to the Fed’s policy of raising rates to combat inflation. Rate increases have caused many multifamily properties to experience cash flow problems.

Last year, starting in May 2022, the Federal Reserve began increasing the Federal Funds rate in order to slow down the rate of inflation. The Federal Reserve continued raising the Fed funds rate aggressively during 2022. In 2023, the Federal Reserve announced that it would continue with rate increases in 2023, although the rate increases would not as sharp. These increases in the Fed funds rates have caused long term US Treasury rates to rise dramatically as well. In January of 2022 the 5 year Treasury rate was at 1.37% and the 10 year Treasury was at 1.66%. Today, the 5 year Treasury is at 4.333% and the 10 year is at 4.315%. Most commercial mortgage loans are priced based on one of these two indices. Equally shocking, the Prime Rate has climbed from 3.50% to 8.50% over the same time period. Many consumer and small business loans are based on the Prime Rate. Today’s much higher rates are making borrowing much more costly for individuals, small businesses, and commercial real estate investors. With a larger portion of their cash flow being used to cover higher commercial mortgage payments, investors are finding it hard to remain profitable. Many retail and office buildings are subject to longer term leases, making rental rate increases hard to implement. As such, many properties today are facing intense pressure to stay cash positive. Many billions of dollars of commercial mortgage loans are set to mature in 2023 and owners are facing tough times refinancing this debt at today’s much higher rates. We are already seeing some investors default on their loans, and we expect to see the foreclosure rate increase as more and more investors are unable to refinance maturing debt.

Learn More About Commercial Mortgage Rates

Some commercial mortgage lenders lock rates at application, some lenders lock rates at commitment, while others lock rates prior to closing. We are currently in the midst of an increasing rate environment. Rates quoted at application may increase dramatically during the loan application progress, if not locked. It is very important to understand your lender’s procedure upfront to avoid potential confusion.

In order for a commercial mortgage lender to issue a firm loan approval, they will want to understand the financial condition of the borrower, as well as the fundamentals of the property. The borrower will be expected to supply his personal financial statement showing total net worth and liquidity. He will also need to provide a schedule of real estate owned demonstrating experience managing similar properties. Lastly, the borrower’s credit scores will needed. For the subject property, lenders will look closely at the current rent roll, operating statements showing income and expenses, copies of all leases, and other pertinent property information.

Commercial mortgage rates are determined by many different factors, including property type, location of the property, loan-to-value ratio, debt service coverage ratio, debt yield, borrower’s net worth, liquidity, credit rating and level of experience. Commercial mortgage lenders look at all of these factors to determine the riskiness of the loan before setting rates. Loans with the lowest risk profile will get the best rates. As the potential risk increases, rates usually increase.

Commercial mortgage loans are viewed differently by lenders than residential loans. Home loan lenders look strictly at the borrower’s income and credit in order to qualify. Commercial mortgage lenders look at the subject property’s rent roll, operating statements, and other factors to determine the cash flow or net income potential. Very strong (low risk) commercial mortgage loans might be priced lower than home loans, while weaker performing properties (higher risk) might be priced higher.

Most commercial mortgage loans today are fixed for 5, 7, or 10 years and come with a 25-30 year amortization schedule. Loans can be recourse (personal guarantee) or non-recourse (no personal guarantee). Commercial mortgage loans typically carry prepayment penalties, whereas residential home loans usually do not. Specific terms will be determined by your lender’s underwriting team after your application is reviewed.

Commercial mortgage lenders typically lend up to 75-80% on an apartment purchase (down payment of 20-25% necessary). On other types of commercial property, commercial mortgage lenders will typically lend up to 70-75% (down payment of 25-30% necessary). An exception is for owner occupied business real estate (such as a business owner buying his own property). Owner/users may qualify for up to 90% LTV financing.

Our Commercial Mortgage Benefits

Commercial mortgage rates start as low as 5.47% (as of February 22nd, 2024)
• A commercial mortgage broker with over 30 years of lending experience
• No upfront application or processing fees
• Simplified application process
• Up to 80% LTV on multifamily, 75% on commercial (90% with SBA)
• Terms and amortizations up to 30 years
• Loans for purchase and refinance, including cash-out
• 24 hour written pre-approvals with no cost and no obligation

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Multifamily Loan Rates - Detailed

For the most accurate and up-to-date information on multifamily rates, rental market trends, and investment opportunities, select your state from the dropdown menu below:

Updated February 22nd, 2024

Multifamily Loan Rates Over $6,000,000 Rate* Amortization
5 Year Fixed 5.56% Up to 30 years
7 Year Fixed 5.52% Up to 30 years
10 Year Fixed 5.47% Up to 30 years
  • Tiered pricing from 55% – 80% LTV
  • Simplified underwriting for small balance loans
  • Loan amounts from $6,000,000+
  • Loan to value ratios up to 80% on purchases and 75% on refinances
  • Cash out refinances are acceptable
  • Pricing based on loan-to-value and debt service coverage ratio:
    • Tier 2 - 75-80%/1.25x
    • Tier 3 - 65%/1.35x
    • Tier 4 – 55%/1.55x
  • Interest only loans are available
  • Step down and yield maintenance prepayment penalties
  • Nonrecourse loans are available
  • We specialize in multifamily loans and will find the best rates and terms for your specific needs.
  • Multifamily Loan Rates Under $6,000,000 Rates* Amortization
    5 Year Fixed 5.92% Up to 30 years
    7 Year Fixed 5.83% Up to 30 years
    10 Year Fixed 5.80% Up to 30 years
  • Tiered pricing from 55% – 80% LTV
  • Simplified underwriting for small balance loans
  • Loan amounts from $1,500,000 - $6,000,000, up to $7,500,000 in large markets
  • Loan to value ratios up to 80% on purchases and 75% on refinances
  • Cash out refinances are acceptable
  • Pricing based on loan-to-value and debt service coverage ratio:
    • Tier 2 - 75-80%/1.25x
    • Tier 3 - 65%/1.35x
    • Tier 4 – 55%/1.55x
  • Interest only loans are available
  • Step down and yield maintenance prepayment penalties
  • Nonrecourse loans are available
  • We specialize in multifamily loans and will find the best rates and terms for your specific needs.
  • Commercial Mortgage Rates - Detailed

    For the most accurate and up-to-date information on rates, rental market trends, and investment opportunities, select your state from the dropdown menu below:

    Commercial Mortgage Rates Updated February 22nd, 2024

    Loan Product Rate* Amortization
    3 Year Fixed 6.84% Up to 25 years
    5 Year Fixed 6.71% Up to 25 years
    7 Year Fixed 6.73% Up to 25 years
    10 Year Fixed 6.71% Up to 25 years
  • Up to 75% LTV
  • Simplified underwriting for small balance loans
  • Loan amounts from $1,500,000
  • Loan to value ratios up to 75%. 
  • Loan to value ratios up to 90% on SBA deals (owner/user commercial properties)
  • Step down and yield maintenance prepayment penalties
  • Nonrecourse loans are available
  • CMBS Rates - Detailed

    Updated February 22nd, 2024

    Loan Product Rate* Amortization
    10 Year Fixed 6.33%-6.93% Up to 30 years
  • Up to 75% LTV
  • Loan amounts from $2 million and up
  • Loans available for apartment buildings, retail shopping centers, office buildings, warehouses and hospitality
  • Loan to value ratios up to 75% on purchases and refinances
  • Cash out refinances are acceptable
  • Interest only loans are available
  • Loans are non-recourse
  • NNN Lease - Detailed

    Updated February 22nd, 2024

    Loan Product Rate* Amortization
    3 Year Fixed 6.44% Up to 30 years
    5 Year Fixed 6.31% Up to 30 years
    7 Year Fixed 6.33% Up to 30 years
    10 Year Fixed 6.31% Up to 30 years
  • Up to 75% LTV
  • Credit tenants such as Walgreen’s, CVS, AutoZone, Panera Bread, etc.
  • Up to 75% LTV for purchases and refinances
  • Cash out available
  • Low step-down prepayment penalties
  • Loan terms up to remaining lease term
  • Fannie Mae Small Balance Apartment - Detailed

    Updated February 22nd, 2024

    Loan Product Rate* Amortization
    5 Year Fixed 5.92%-6.90% Up to 30 years
    7 Year Fixed 5.83%-6.75% Up to 30 years
    10 Year Fixed 5.80%-6.69% Up to 30 years
    15 Year Fixed 6.09%-6.97% 30 years
    30 Year Fixed 5.96%-6.89% 30 years
  • Tiered pricing from 55% – 80% LTV
  • Simplified underwriting for small balance loans
  • Loan amounts from $1,500,000 - $6,000,000
  • Loan to value ratios up to 80% on purchases and 75% on refinances
  • Cash out refinances are acceptable
  • Pricing based on loan-to-value and debt service coverage ratio:
    • Tier 2 - 75-80%/1.25x
    • Tier 3 - 65%/1.35x
    • Tier 4 – 55%/1.55x
  • Interest only loans are available
  • Step down and yield maintenance prepayment penalties
  • Nonrecourse loans are available
  • Additional Fannie Mae Small Balance Apartment Loan Information
  • Fannie Mae Large Balance Apartment - Detailed

    Updated February 22nd, 2024

    Loan Product Rate* Amortization
    5 Year Fixed 5.56%-6.42% Up to 30 years
    7 Year Fixed 5.52%-6.39% Up to 30 years
    10 Year Fixed 5.47%-6.37% Up to 30 years
    15 Year Fixed 5.77%-6.66% 30 years
    30 Year Fixed 5.68%-6.55% 30 years
  • Tiered pricing from 55% – 80% LTV
  • Simplified underwriting for small balance loans
  • Loan amounts from $6,000,000+
  • Loan to value ratios up to 80% on purchases and 75% on refinances
  • Cash out refinances are acceptable
  • Pricing based on loan-to-value and debt service coverage ratio:
    • Tier 2 - 75-80%/1.25x
    • Tier 3 - 65%/1.35x
    • Tier 4 – 55%/1.55x
  • Interest only loans are available
  • Step down and yield maintenance prepayment penalties
  • Nonrecourse loans are available
  • Additional Fannie Mae Large Balance Apartment Loan Information
  • Freddie Mac Small Balance Apartment - Detailed

    Updated February 22nd, 2024

    Loan Product Rate* Amortization
    5 Year Fixed 6.52% Up to 30 years
    7 Year Fixed 6.46% Up to 30 years
    10 Year Fixed 6.43% Up to 30 years
  • Tiered pricing from 55% – 80% LTV
  • Simplified underwriting for small balance loans
  • Loan amounts from $1,500,000 - $6,000,000, up to $7,500,000 in large markets
  • Loan to value ratios up to 80% on purchases and 75% on refinances
  • Cash out refinances are acceptable
  • Pricing based on loan-to-value and debt service coverage ratio:
    • Tier 2 - 75-80%/1.25x
    • Tier 3 - 65%/1.35x
    • Tier 4 – 55%/1.55x
  • Interest only loans are available
  • Step down and yield maintenance prepayment penalties
  • Nonrecourse loans are available
  • Additional Freddie Mac SBL Information
  • Bank Apartment Mortgage - Detailed

    Updated February 22nd, 2024

    Loan Product Rate* Amortization
    5 Year Fixed 6.75%-7.25% Up to 30 years
    7 Year Fixed 6.75%-7.25% Up to 30 years
    10 Year Fixed 6.90%-7.50% Up to 30 years
    • Tiered pricing from 55% – 80% LTV
    • Simplified underwriting for small balance loans
    • Loan amounts from $1,500,000 - $10,000,000+ Nationwide
    • Loan to value ratios up to 80% on purchases and 75% on refinances
    • Cash out refinances are acceptable
    • Pricing based on loan-to-value and debt service coverage ratio:
      • Tier 2 - 75-80%/1.25x
      • Tier 3 - 65%/1.35x
      • Tier 4 – 55%/1.55x
    • Interest only loans are available
    • Step down and yield maintenance prepayment penalties
    • Nonrecourse loans are available

    CMBS Multifamily - Detailed

    Updated February 22nd, 2024

    Loan Product Rate* Amortization
    10 Year Fixed 6.33%-6.93% Up to 30 years
    • Up to 75% LTV
    • Loan amounts from $2 million and up
    • Loans available for apartment buildings, retail shopping centers, office buildings, warehouses and hospitality
    • Loan to value ratios up to 75% on purchases and refinances
    • Cash out refinances are acceptable
    • Interest only loans are available
    • Loans are non-recourse

    Multifamily Bridge

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    Owner Occupied Commercial Mortgage Rates - Detailed

    Updated February 22nd, 2024

    Loan Product Rate* Amortization
    3 Year Fixed 6.64% Up to 30 years
    5 Year Fixed 6.51% Up to 30 years
    7 Year Fixed 6.53% Up to 30 years
    10 Year Fixed 6.51% Up to 30 years
  • Up to 80% LTV
  • Step-down prepayment penalties
  • Loan to value ratios up to 80%, 90% with SBA
  • Loans from $1,500,000 and up
  • 51% or more of the property to be owner occupied
  • Small Business Administration (SBA) - Detailed

    Updated February 22nd, 2024

    Loan Product Rate* Amortization
    Adjustable 8.99%-10.50% Up to 25 years
    5 Year Fixed 8.99%-10.50% Up to 25 years
  • Up to 90% LTV, 100% possible
  • Loans for the purchase or refinance of owner occupied properties
  • Relaxed income and credit qualifying guidelines
  • Capital available for working capital, equipment, and accounts receivable
  • Loans up to 90% LTV (100% for certain professional businesses)
  • Loans from $1,500,000+