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Commercial Real Estate Rates: What to Know Right Now

What are commercial real estate rates right now?

Commercial real estate rates vary by lender, property type, loan structure, and borrower. There is no single rate that applies to every purchase, and a current quote can change as market conditions move. To understand what you may pay, compare offers for the same property, loan amount, term, and down payment.

Our team recommends treating the interest rate as a starting point rather than the whole cost. Origination fees, closing costs, prepayment penalties, and whether the rate is fixed or variable can make one loan more expensive than another, even when its advertised rate looks lower.

What affects your commercial mortgage rate?

Lenders assess both your finances and the property’s ability to support the loan. These factors commonly influence the rate and terms you receive:

Property type and occupancy: An owner-occupied building and an investment property may qualify for different financing programs.
Down payment and loan-to-value ratio: A larger down payment reduces the lender’s exposure and may improve your terms.
Income and debt coverage: Lenders review cash flow to determine whether the property or business can cover payments.
Credit and experience: Your credit history, financial strength, and experience managing similar properties can matter.
Loan structure: The term, amortization period, rate reset, and any balloon payment all affect your costs and risk.

How can you compare commercial loan offers?

Ask each lender for a written estimate that includes the interest rate, annual percentage rate when available, fees, monthly payment, amortization schedule, and prepayment terms. Confirm how long the quote is valid and whether the rate can change before closing.

For perspective, a $1 million loan at a hypothetical 7% fixed rate, amortized over 25 years, has a monthly principal-and-interest payment of approximately $7,068. That example is not a current quote and excludes taxes, insurance, fees, and other property expenses.

If you’re preparing to buy, our five-step commercial real estate buyer toolkit can help you organize the process alongside your financing comparison.

FAQ

What is a balloon payment on a commercial mortgage?

A balloon payment is a remaining loan balance that comes due at the end of the loan term when the payment schedule extends beyond that term. You may need to pay it from available funds, refinance, or sell the property.