Commercial real estate is a big investment. That’s why locking in the best rate for your loan matters. Even a small difference in interest rates can have a big impact on monthly payments and your long-term business finances.
But commercial real estate loan rates can vary dramatically. They depend on factors like the type of loan, current market conditions, the property itself and your qualifications.
We’ll start with a brief questionnaire to better understand the unique needs of your business.
Once we uncover your personalized matches, our team will consult you on the process moving forward.
Average commercial real estate loan rates in 2025
Here are the average commercial real estate loan rates by loan type:
Conventional commercial loan
Offered by banks, credit unions and some online lenders.
Interest rates are typically fixed, and terms may last 5 to 10 years, upon which a balloon payment is due.
Offered by participating lenders and certified development companies, and backed by the U.S. government.
Best suited for owner-occupied properties (as opposed to investment properties), and must be used to spur business growth and jobs.
Terms are fully amortizing up to 25 years. (No balloon payment.)
$5 million maximum loan amount (or $5.5 million for projects that meet certain qualifications).
Offered by participating lenders, and backed by the government.
Similar to SBA 504 loans, SBA 7(a) loans are best suited for owner-occupied properties.
Fully amortizing terms up to 25 years.
$5 million maximum loan amount.
May require at least 10% down payment.
Short-term, interest-only loan that helps business owners buy or refinance a commercial property before they secure a longer term loan or sell the property.
Interest-only loan used to fund the construction or renovation of commercial real estate.
Funds are provided in stages as construction progresses.
Once finished, business owners typically pay off the loan using proceeds from the sale or refinance using a bridge loan or long-term commercial real estate loan.
*Note: These rates are estimates based on publicly available information from lender websites and the SBA as of July 2025. Actual rates may vary depending on the lender, borrower qualifications and market conditions.
What is a commercial real estate loan?
Commercial real estate loans help business owners buy, build, renovate or refinance property used in business, such as a retail shop, a dentist’s office, a restaurant or apartment building.
These loans usually have fixed interest rates and terms that last five, seven or 10 years (or more). Many also include a balloon payment, which is a big lump sum due at the end of the loan. Like residential mortgages, if you fail to make payments, the lender can take your property.
What will happen to commercial mortgage rates in 2025?
Tighter lending standards and higher interest rates have made it harder for business owners to secure or refinance commercial real estate loans in 2025.
While the Fed expects to make at least one rate cut later this year, and potentially more in 2026, it’s unlikely we’ll see pre-2022 rates on business loans any time soon.
How to get the best rate on a commercial real estate loan
While market conditions are outside your control, here are a few things you can do to get a lower rate:
1. Put more money down
Lenders like it when you have more skin in the game. A bigger down payment reduces their risk and can result in a lower interest rate. It also improves key financial ratios like your debt service coverage ratio (DSCR) and loan-to-value ratio (LTV), two metrics lenders watch closely.
2. Boost your credit score
While not a quick fix, strengthening your personal and business credit scores can lead to better loan terms, especially in today’s climate. Lenders use credit to evaluate your financial reliability, and higher scores generally translate to lower rates and better terms.
3. Strengthen your business finances
Lenders want to know your business is healthy and running smoothly. That’s why improving your revenue and maintaining low debt levels can go a long way in securing a better rate.
4. Shop around
Don’t settle for the first loan offer you get. Commercial real estate loan rates can vary widely from one lender to another, so it pays to compare multiple offers. If time allows, cast a wide net, including banks, credit unions, online lenders and SBA-backed options.
4. Negotiate
Unlike many consumer or small-business loans, commercial real estate loans often leave room for negotiation, especially for well-qualified borrowers. If you’ve received a better offer from another lender, use it as leverage to negotiate a lower rate, reduced fees or more favorable terms.
5. Work with a commercial mortgage broker
A qualified business loan broker can do the heavy lifting for you, potentially saving you time and money. They typically have industry connections and can often access loans you may not find easily on your own.
Did you know…
To avoid a large balloon payment, many borrowers with a conventional loan refinance before their loan term ends. But that can put your finances in a tough spot if today’s rates are higher than when you first borrowed. Plus, many commercial real estate loans come with prepayment penalties.
What determines your commercial real estate loan rate?
Many factors impact the rate you get on a commercial real estate loan. Here’s a list of some of the most common ones:
Lender. Not all lenders price loans the same way. Each has different risk tolerances and borrower profiles they prefer. Also, the type of lender matters a lot. For example, banks tend to offer the most competitive rates, while online lenders typically charge much more.
Loan type. Some loan types tend to charge borrowers more than others. For example, SBA loans usually offer competitive rates, while bridge loans often charge more due to their high-risk nature.
Loan size and term. Generally, the larger the loan and shorter the term, the better the rate (but higher your monthly payments). Lenders also want to see a healthy DSCR and LTV.
Property details. The type of property you’re financing, its location and whether it’s owner-occupied or an investment property all impact the rate you’ll pay. For example, you’ll likely unlock a better rate if you’re financing a multifamily rental property in a popular part of town than an office building in a rural area.
Business profile. Lenders want to see a financially healthy business. Key indicators they may look at include time in business, revenue and cash flow.
Borrower profile. Generally, the more business experience you have and the higher your credit score and net worth, the better your chances of getting a lower rate.
Economic conditions. Broader market conditions such as Federal Reserve policy, inflation trends and market demand for commercial lending all impact interest rates for commercial mortgages.
