Searching for commercial mortgage rates online can be a challenging task, as mortgages on commercial properties come in many different varieties and from an overwhelming number of possible lenders. You may be looking to refinance, purchase, or leverage existing equity but the first step is checking the rates and understanding your options.
The industry is filled with jargon and rates are updated daily making it harder for the average consumer to compare apples to apples. If you have been turned down by your local lender for commercial mortgage financing and or you, just wish to comparison shop to find the best rates you have are in the right website.
Click Quote Save is a free comparison website for commercial mortgage loand and other financial services. Our job is to find you the lowest interest rates, while saving you time and aggrevation. We start off by showing you all the different funding options you have available.
After matching thousands of commercial loans the one piece of advice we can give to all is that you have to comparison shop to secure the best potential deal. We can give you our list of ove 1000 commercial lenders for you to filter through or you can simply fill out a quote form and we will do the rest of the hard work on your behalf. Our platform is free for consumers to use (paid for by the commercial lenders).
Potential borrowers are exposed to a lot of disorientating information from which it can get difficult to extract an actual interest percentage. Let’s start with how do lenders figure out your interest rate or costs to acquire the loan.
- Loan to value
- Debt service coverage ratio
- Rate spread
- Lender fees
- Property age
- Property Value and type
- Down payment or equity built up
- Your credit score/income
- Revenues from the business or expected revenues
Before we get down to the raw interest percentage numbers, it is essential for you to understand, that commercial mortgages tend to be slightly higher (0.5 % to 1.0 %) than the standard 30-year residential mortgages. This is an industry standard across the board, a rule of thumb… E.g If you are qualified to refinance a residential property today at 3%, this will translate into a 3.5-4% for a commercial property. SBA loans and USDA loans are higher more expensive, ranging from 2-2.5% above prime residential mortgage rates. In the example above this would put your rates at 5-5.5.% with SBA or a USDA loan. Conduits and life insurance companies have the lowest markups (but higher loan amounts) with an increase of (0.35% to 0.75%).
However, commercial mortgage rates are still historically low right now, making this the perfect time for you to start a new business, expand an existing one or improve the quality of your products or services through the useful means of extra capital.
At Click Quote Save we are here to help you, we’ve gathered the current rates on commercial mortgages loans and arranged them in easy to read, time and frustration saving brackets, which will help you get an idea of which commercial mortgage rate will be the best for you! At no cost.
A quick look at commercial mortgage rates for mortgages on commercial properties with 25 or 30 year amortization periods: Commercial mortgage rates from various lenders with a fixed rate for:
- -3 years vary from 3.000% – 4.250% (300 – 425 basis points)
-5 years range from 3.125% – 4.250% (312.5 – 425 basis points)
-7 years range from 3.500% – 4.625% (350 – 462.5 basis points)
-10 years range from 3.650% – 5.250% (365 – 525 basis points)
Although unpopular and difficult to find, you can expect a commercial mortgage rate for a fixed period of 30 years from mid 5.0% to low 6.0 % (from 550 – 650 basis points) - A more detailed look at commercial mortgage rates from specific groups of lenders, including lenders outside the most popular 25 or 30 year amortization periods:
-Life insurance companies’ commercial mortgage rates vary from 3.35% – 4.50% (335 – 450 basis points). These commercial mortgages are difficult to qualify for, usually, have a set minimum and have a large defeasance fee.
-CMBS Lenders (also known as Conduits) commercial mortgage rates vary from 3.15% – 5.00% (315 – 500 basis points), Please note that the commercial mortgage rates from CMBS lenders are gyrating wildly in light of market volatility.
-Commercial Banks/Credit Unions commercial mortgage rates vary from 3.35% – 6.00% (335 – 600 basis points) These lenders offer a wide variety of commercial mortgage loans based on property type and loan.
-SBA 7(a) commercial mortgage rates vary from 4.25% – 6.25% (425 – 625 basis points) -SBA 504 commercial mortgage rates range from 3.75% – 5.30% (375 – 530 basis points)
-USDA B&I commercial mortgage rates vary from 5.50% – 6.50% (550 – 650 basis points) these loans are designed to promote job growth and are partially guaranteed by the federal government in rural areas.
-Soft money loans commercial mortgage rates vary from 6.00% – 18.00% (600 – 1,800 basis points) Lower rates and shorter terms (6 months to 5 years)
-Hard money commercial mortgage rates vary from 10.00% – 19.00% (1,000 – 1,900 basis points) Highest interest rates of all commercial loans of all types. Please note that these loans were meant for short term financing and range from 3 to 18 months amortization periods, they also have high origination fees.
| KEY MARKET INTERESTS THAT DETERMINE COMMERCIAL LOAN RATES | |||
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Index
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Rates
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Prime
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3.500%
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30 Day Libor
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0.527%
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90 Day Libor
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0.852%
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6 Month Libor
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1.250%
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1 Year Libor
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1.557%
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3 Year Swap
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1.050%
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5 Year Swap
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1.160%
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10 Year Swap
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1.420%
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5 Year Treasury
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1.230%
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10 Year Treasury
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1.670%
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10 Year SBA 504
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4.280%
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20 Year SBA 504
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4.080%
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As it is in our interest to see your business succeed, we urge you to keep a couple of things in mind when searching for the best possible commercial mortgage interest rates. From typical lenders, you can expect a fixed rate for an entire term, usually lasting 5 or 10 years, after which the rates are recalculated to fit the market. Some commercial mortgage loans require a large sum of repayment after a certain amount of terms called a balloon payment. If we can assist you further in any way, please call one of our expert consultants and we’d be happy to help.