When it comes to financing commercial real estate, getting the best mortgage rate can save your business thousands over the life of the loan. Whether you’re buying an office building, retail space, or industrial property, understanding how commercial mortgage rates work and where to find the best deals is key.
This simple guide breaks down the essentials about commercial mortgage rates in the USA so you can make confident, cost-effective decisions.
What Are Commercial Mortgage Rates?
Commercial mortgage rates are the interest rates lenders charge on loans for purchasing or refinancing commercial properties. Unlike residential mortgages, commercial loans often have:
-
Shorter terms (typically 5 to 20 years)
-
Higher interest rates due to increased risk
-
Variable or fixed rate options
Factors That Influence Commercial Mortgage Rates
-
Creditworthiness: Strong credit scores and business financials get better rates.
-
Loan-to-Value (LTV) Ratio: Lower LTVs usually mean lower rates; lenders prefer borrowers who put down more equity.
-
Loan Type: Fixed-rate loans generally have higher rates than variable (adjustable) ones.
-
Property Type: Office buildings, retail, industrial, and multifamily properties may have different rates.
-
Market Conditions: Interest rates fluctuate with the economy and Federal Reserve policies.
-
Loan Amount & Term: Larger loans or longer terms may affect the rate offered.
Typical Commercial Mortgage Rate Ranges (2025 Estimates)
| Loan Type | Typical Interest Rate Range (Annual) |
|---|---|
| Fixed-Rate Loans | 6.0% – 8.0% |
| Variable-Rate Loans | 5.0% – 7.5% + margin |
| SBA 7(a) Loans | 6.5% – 8.5% |
| SBA 504 Loans | 5.5% – 7.0% |
Note: Rates vary based on lender and borrower profile.
Where to Find the Best Commercial Mortgage Rates
-
Traditional Banks: Often offer competitive fixed and variable rates but have strict approval requirements.
-
Credit Unions: Can provide lower rates to members and more personalized service.
-
Non-Bank Lenders: May have more flexible underwriting but sometimes higher rates.
-
SBA-Backed Loans: Government-backed loans with competitive rates, ideal for small businesses.
-
Online Lenders: Fast application process and competitive rates, but watch for fees.
Tips to Secure Lower Commercial Mortgage Rates
-
Improve your credit score and financial documentation
-
Increase your down payment to lower your LTV ratio
-
Shop around and compare multiple lender offers
-
Consider shorter loan terms for better rates
-
Lock in a fixed rate if you expect interest rates to rise
Conclusion
Understanding commercial mortgage rates and where to find the best options can save you significant money on your real estate investment. Always compare offers carefully, and consider your business’s financial health and long-term goals when choosing loan terms.