What are commercial property loan rates right now?
This is arguably the most important question in commercial real estate today — because the cost of financing directly impacts what you can afford, what you should pay, and whether a deal actually works.
I’m Matt Bingaman, Commercial Real Estate Advisor, and I walk my clients through financing strategy on virtually every deal. Here’s what you need to know about commercial property loan rates in 2025.
Current Commercial Property Loan Rates (2025)
As of early-to-mid 2025, here’s a general snapshot of where commercial property loan rates are sitting:
Loan Type
Rate Range
Conventional Bank Loans
6.5% – 8.5%
SBA 504 Loans
5.5% – 7.0%
SBA 7(a) Loans
7.0% – 9.5%
CMBS (Conduit) Loans
6.0% – 7.5%
Bridge Loans
8.0% – 12.0%
Hard Money Loans
10.0% – 15.0%
Life Insurance Company Loans
5.5% – 7.0%
Agency (Fannie/Freddie) Multifamily
5.5% – 7.0%
Note: Rates fluctuate based on market conditions, borrower profile, property type, and deal specifics.
What Affects Your Rate?
Not everyone gets the same rate. In my experience, here are the biggest factors that determine where you’ll land on the spectrum:
1. Property Type & Condition
Lenders view different property types differently. A stabilized, fully leased industrial building will get a better rate than a vacant office building that needs repositioning. Lower risk = lower rate.
2. Borrower Strength
Your credit score, net worth, liquidity, and experience all matter. Lenders want to know that if the property underperforms, you have the financial strength to weather the storm.
3. Loan-to-Value (LTV) Ratio
The more equity you put in, the less risk the lender takes on. Most commercial loans require 25–35% down, and borrowers putting more skin in the game get rewarded with better rates.
4. Debt Service Coverage Ratio (DSCR)
Lenders want to see that the property’s income comfortably covers the debt payment — typically at a 1.25x ratio or higher. Stronger DSCR = better terms.
5. Loan Term & Amortization
Shorter-term loans and loans with longer amortization periods (spreading payments over more years) may carry different rate structures. A 5-year term with a 25-year amortization is common in commercial lending.
6. Market & Economic Conditions
The Federal Reserve’s monetary policy, the 10-year Treasury yield, and overall economic conditions set the baseline for where rates land.
How to Get the Best Rate
Here’s what I tell every client looking to finance a commercial property:
- Shop multiple lenders — Don’t just go to your local bank. Compare rates from banks, credit unions, CMBS lenders, SBA lenders, and life insurance companies
- Get your financials in order — Clean, organized financial statements and tax returns make you a more attractive borrower
- Consider an SBA loan — If you’re an owner-occupant (using the property for your own business), SBA 504 loans offer some of the best rates and terms available
- Work with a mortgage broker — A good commercial mortgage broker can access dozens of lenders and find you terms you’d never find on your own
- Lock when it makes sense — If rates are favorable and the deal works, don’t try to time the bottom. A good deal at today’s rate is better than a missed deal waiting for a lower one
Why This Matters Beyond Just the Rate
I’ve seen clients fixate on getting the lowest possible rate while ignoring equally important terms like prepayment penalties, recourse vs. non-recourse, rate lock periods, and extension options. The cheapest rate with the worst terms can cost you more in the long run.
My job is to help you evaluate the total cost and total risk of your financing — not just the headline rate.
Let’s Find the Right Financing for Your Deal
If you’re exploring a commercial property purchase, refinance, or construction project, I can help you navigate the lending landscape and connect you with the right capital sources.
📞 Contact Matt Bingaman to discuss your commercial real estate financing strategy.