Commercial Loan Rate Averages: February 2026
Terrydale Capital
Feb 4, 2026 19 Min read
If you're shopping for a commercial loan right now, the first thing you want to know is simple. What are rates actually doing?
The answer, as of early February 2026, is that they're holding relatively steady. Commercial loan rates range from roughly 4.93% on the low end for conventional bank financing all the way up to 12.75% for short-term bridge debt. The 10-year Treasury sits around 4.27%. The Federal Reserve held the federal funds rate at 3.50% to 3.75% at its January 28 meeting. And the market is still digesting what all of that means for the rest of the year.
But averages only tell you so much. The rate you actually get depends on the loan product, your property, your financial strength, and the lender sitting across the table.
So let's break it down.
Current Commercial Loan Rates at a Glance
Here's where the major commercial loan products stand as of February 4, 2026:
| Loan Type | Rate Range | Max LTV | Max Term |
|---|---|---|---|
| Conventional Bank | 4.93% - 8.75% | 75% - 85% | 3 - 15 yrs |
| SBA 504 | 5.67% - 5.92% | 90% | 10 - 25 yrs |
| SBA 7(a) | 5.25% - 8.75% | 85% | 10 - 25 yrs |
| CMBS / Conduit | 5.83% - 7.78% | 75% | 5 - 10 yrs |
| Life Insurance Co. | 5.23% - 8.60% | 70% | 5 - 30 yrs |
| Fannie Mae | 5.18% - 6.50% | 80% | 5 - 30 yrs |
| Freddie Mac | 5.18% - 6.50% | 80% | 5 - 30 yrs |
| HUD / FHA | 5.42% - 6.00% | 85% | 35 - 40 yrs |
| Bridge Loans | 5.75% - 12.75% | 80% | 6 - 36 mos |
| Construction | 5.50% - 8.75% | 75% | 6 - 36 mos |
| Mezzanine | 6.55% - 11.87% | 85%+ | 1 - 5 yrs |
These numbers are averages. Your actual rate will depend on factors like property location, asset quality, borrower experience, and the overall strength of the deal. A Class A apartment complex in Dallas is going to price differently than a suburban office building in a secondary market. That's just how it works.
What's Driving Commercial Loan Rates Right Now?
The 10-Year Treasury
Most long-term commercial mortgage rates are priced off the 10-year Treasury yield. Right now, that yield is sitting around 4.27%. It has bounced around between 4.10% and 4.30% over the past month.
Why does this matter? Because when the 10-year moves, your fixed-rate commercial mortgage moves with it. Lenders price their loans as a spread over the Treasury. If the 10-year is at 4.27% and your lender's spread is 200 basis points, your rate lands around 6.27%. Simple math, but it drives the entire market.
The Federal Reserve
On January 28, the Fed kept rates unchanged at 3.50% to 3.75%. Chair Powell called the economy solid and said the committee wants to see more data before making its next move. Markets are pricing in two rate cuts for 2026, possibly in June and October, but nothing is guaranteed.
Here's the thing most borrowers miss: the Fed's rate directly affects short-term and floating-rate loans, like bridge debt and adjustable-rate bank loans. But it doesn't directly set the rate on your 10-year fixed mortgage. That's driven by bond markets, inflation expectations, and investor sentiment.
Think of it this way. The Fed controls the faucet for short-term money. The bond market controls the river for long-term money. They're connected, but they're not the same thing.
Incoming Fed Chair Kevin Warsh
President Trump nominated Kevin Warsh as the new Federal Reserve Chair. Warsh is widely viewed as an inflation hawk, someone who tends to favor tighter monetary policy. Markets have already started pricing in what his leadership might mean. The yield curve has steepened slightly at the long end since the announcement, which could put upward pressure on long-term fixed rates in the months ahead.
For borrowers, this is worth watching. If Warsh takes a harder line on inflation than Powell did, rate cuts could come more slowly than expected. That has real implications for anyone waiting to refinance.
A Closer Look at Each Loan Product
Conventional Bank Loans
Bank loans remain the workhorse of commercial real estate lending. Rates currently range from about 4.93% to 8.75%, depending on whether you go fixed or floating and how long of a term you need.
Here's where bank loans shine: if you have strong deposit relationships, a solid track record, and you're willing to provide a personal guarantee, banks will compete hard for your business. Credit unions in particular have been aggressive on pricing. Some are quoting rates in the low-to-mid 5% range for well-qualified borrowers with strong properties.
The trade-off is that bank loans are usually recourse, meaning you're personally on the hook. And underwriting tends to look at your global cash flow, not just the property. That's a higher bar for some borrowers.
Example: A borrower with a 720 credit score and a stabilized 40-unit apartment complex in the Dallas-Fort Worth metro could realistically lock in a 5-year fixed bank loan in the mid-5% range, assuming a 70% LTV and a 1.30x debt service coverage ratio.
SBA Loans (504 and 7a)
SBA loans continue to offer some of the best terms for owner-occupied commercial properties. The 504 program is especially attractive right now, with 20-year fixed rates around 5.91% and 25-year rates near 5.85%. LTVs go up to 90%, which means less cash out of pocket for the borrower.
The 7(a) program is more flexible in how you use the funds, covering everything from real estate to equipment to working capital. Rates range from 5.25% to 8.75% depending on the term and structure.
The catch with SBA loans is speed. The approval process involves a Certified Development Company (for 504 loans) or an SBA-approved lender, and that adds layers of paperwork and timeline. If you need to close quickly, an SBA loan might not be your best bet. But if you have time and you qualify, the terms are hard to beat.
CMBS / Conduit Loans
CMBS loans are non-recourse, meaning the lender can't come after your personal assets if things go sideways. That's a big deal for investors who want to protect their balance sheet. Current rates run between 5.83% and 7.78% for 5 to 10-year fixed terms.
These loans are best suited for stabilized, income-producing properties. Lenders care more about the property's cash flow than the borrower's net worth. But be aware: CMBS loans come with stricter prepayment penalties (yield maintenance or defeasance), and the servicing can feel impersonal once the loan is securitized.
Example: An investor refinancing a 120-unit Class B apartment complex with a 1.35x DSCR and a strong occupancy rate could lock a 10-year fixed CMBS loan around 6.50% to 7.00%, non-recourse, with 30-year amortization.
Life Insurance Company Loans
Life companies offer some of the lowest rates in the market. We're talking 5.23% to 8.60% for terms ranging from 5 to 30 years. They're the gold standard for long-term, fixed-rate financing on high-quality properties.
But here's the reality: life companies are picky. They want newer, well-maintained properties in major markets. They want experienced borrowers. And they typically cap LTV at 65% to 70%. If your deal fits their box, the terms are outstanding. If it doesn't, they'll pass.
Life company loans are also non-recourse, which adds to their appeal for larger deals.
Fannie Mae and Freddie Mac (Agency Loans)
Agency loans remain a go-to for multifamily investors. Both Fannie Mae and Freddie Mac are quoting rates starting around 5.18% as of early February. FHFA raised the 2026 multifamily loan purchase caps to $88 billion per agency, up 20% from 2025. That's $176 billion in combined lending power.
The higher caps mean more room for both agencies to lend this year. That's good news for borrowers, especially with a significant amount of multifamily debt maturing in 2026 that needs to be refinanced.
Agency loans offer non-recourse terms, long fixed-rate periods, interest-only options, and high LTVs up to 80%. The trade-off is tighter underwriting standards and borrower experience requirements. Fannie Mae, for instance, typically requires two years of multifamily ownership experience with properties of five-plus units.
Example: A borrower refinancing a 200-unit workforce housing property could take advantage of Freddie Mac's rate starting at 5.18% with a 10-year fixed term, 30-year amortization, and non-recourse structure. Workforce housing loans are excluded from the agencies' volume caps, which means more availability and competitive pricing.
HUD / FHA Multifamily Loans
HUD loans offer the longest terms and among the lowest rates in the entire commercial lending market. Current rates start around 5.42% for a fully amortizing, fixed-rate mortgage that can extend beyond 35 years. The 221(d)(4) program for new construction and substantial rehabilitation can go over 40 years.
The downside? Speed. HUD loans are notorious for long processing times. We're talking months, not weeks. But if your timeline allows it, no other product matches HUD on total cost of capital over the life of the loan.
Bridge Loans
Bridge loans are short-term solutions for properties in transition. Rates range from 5.75% to 12.75%, with terms typically running 6 to 36 months. These are interest-only loans, designed to give you time to renovate, stabilize, or reposition a property before refinancing into permanent debt.
The spread on bridge loans is wide because the risk profile varies so much from deal to deal. A light value-add on a well-located multifamily property might price at 7%. A ground-up conversion of an office building into apartments could be closer to 11% or 12%.
Construction Loans
Construction financing currently ranges from 5.50% to 8.75%. These are also interest-only during the build period, typically 12 to 36 months. LTVs max out around 75% of the completed value.
Getting a construction loan approved in today's market requires a strong sponsor, a solid budget, and a clear exit strategy. Lenders want to know how you're going to pay them back, whether that's through a permanent loan takeout, a sale, or some other path.
Key Market Benchmarks to Watch
If you want to stay ahead of where rates are heading, keep your eye on these three numbers:
10-Year Treasury Yield: Currently around 4.27%. This is the benchmark for most long-term fixed commercial mortgage rates. When it moves, fixed rates follow.
Federal Funds Rate: Currently 3.50% to 3.75%. This drives short-term and floating-rate loan pricing. The market expects two cuts in 2026, but the incoming Fed chair could change that outlook.
SOFR (Secured Overnight Financing Rate): This replaced LIBOR as the benchmark for adjustable-rate commercial loans. Most floating-rate products, including bridge and construction loans, price as a spread over SOFR.
What This Means for Borrowers in 2026
Let's be direct about what the current rate environment means if you're borrowing this year.
First, don't wait for a perfect rate. Rates are unlikely to drop dramatically in the near term. The 10-year Treasury has held stubbornly above 4%, and the incoming Fed chair is not expected to push for aggressive cuts. If you have a deal that works at today's rates, it works.
Second, shop across loan products. The spread between the cheapest and most expensive options is enormous. An SBA 504 loan at 5.85% and a bridge loan at 11% are worlds apart. Matching the right product to your deal can save you hundreds of thousands of dollars over the life of the loan.
Third, if you have multifamily debt maturing this year, start your refinance process now. A huge wave of loans originated in 2021 and 2022 at lower rates are coming due. Lenders will get busier as the year goes on, and borrowers who move early will have more options and better execution.
Fourth, relationships matter more than ever. Lenders are being selective. Having an experienced commercial mortgage advisor who knows which lenders are active, which products fit your deal, and how to package your loan request can be the difference between a smooth closing and a deal that falls apart.
Get Expert Help With Your Commercial Loan
Navigating commercial loan rates doesn't have to be complicated. At Terrydale Capital, we work with borrowers every day to find the right financing across every major loan product: conventional, SBA, CMBS, agency, life company, bridge, and construction.
We leverage deep lender relationships, real-time market data, and decades of experience to get you the best terms available for your specific deal.
Ready to explore your financing options? Get started today at terrydalecapital.com or visit our commercial loan page to see how we can help you secure the right loan at the right rate.
Disclaimer: Rates shown are averages based on publicly available data as of February 4, 2026. Actual rates vary based on property type, borrower qualifications, loan structure, and lender. This article is for informational purposes only and does not constitute a commitment to lend. Contact Terrydale Capital for a personalized quote.
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Headquartered in Dallas, Texas, Terrydale Capital is a leader in commercial real estate financing. We have close relationships with the nation’s top banks, lenders & family offices allowing us to provide the most competitive financing solutions in the market.
