The quick read: Nearly every commercial real estate loan rate is an index plus a spread. The index is a public benchmark no lender controls: SOFR or term SOFR on floating loans, a Treasury yield on most fixed loans, prime on many bank and SBA loans, and, for banks that fund with them, Federal Home Loan Bank advance rates. The spread is the lender's price for your loan and the part you can negotiate. Leverage, coverage, property type, sponsor, term, recourse and prepayment flexibility move it, and no rate is fixed until a lender locks it in writing.
What is a commercial real estate loan interest rate actually made of?
A commercial real estate loan rate is built from a published benchmark index plus a lender spread, and on agency loans the spread itself is a stack of fees and investor yield priced over a Treasury. The index moves with markets every day; the spread is set against your property, leverage and sponsor file.
Fannie Mae's Multifamily Selling and Servicing Guide shows the stack in a hypothetical fixed-rate quote: a 0.95% guaranty fee, plus a 0.55% servicing fee, plus 4.00% of "U.S. Treasury and Investor spread," for a 5.50% gross note rate. The same chapter sets the rate on its structured adjustable-rate loan as the sum of the index (30-day average SOFR), the guaranty fee, the servicing fee and the investor spread.
Bank loans follow the same logic. The Federal Reserve's H.15 release calls the bank prime loan rate "one of several base rates used by banks to price short-term business loans," and the SBA says 7(a) maximum rates "are pegged to the prime rate or an optional peg rate." A bank funding a fixed loan with Federal Home Loan Bank advances borrows at what the Federal Housing Finance Agency describes as "a small spread over comparable U.S. Department of the Treasury obligations," then adds its own margin. The first two questions on any quote are always which index, and what spread over it.
Which index does each type of lender price off, and where do you read it?
Each lender type quotes over its own benchmark: agency lenders price fixed loans over Treasuries and floating loans over 30-day average SOFR, banks over prime, SOFR or their cost of funds, bridge lenders over SOFR, and SBA programs over prime or the 10-year Treasury. You can read every one of those benchmarks for free.
Commercial loan pricing by lender type (spreads and lock terms vary by lender and file):
| Lender type | Usual index | What widens the spread | When the rate locks |
|---|---|---|---|
| Lender type Agency multifamily, fixed | Usual index Treasury yield | What widens the spread Higher leverage, interest-only, thinner coverage, flexible prepayment | When the rate locks At rate lock, with a good faith deposit |
| Lender type Agency multifamily, floating | Usual index 30-day average SOFR | What widens the spread Same credit factors; a required rate cap adds cost | When the rate locks The spread locks; the index resets monthly |
| Lender type Bank or credit union | Usual index Prime, SOFR or the bank's cost of funds | What widens the spread Waived recourse, longer fixed period, thin relationship | When the rate locks At commitment or closing, per the commitment letter |
| Lender type Life company | Usual index 10-year Treasury | What widens the spread Leverage above a low-LTV box, weaker property type | When the rate locks Usually at application or commitment |
| Lender type CMBS conduit | Usual index 10-year Treasury | What widens the spread Property type, leverage, debt yield | When the rate locks Near closing, unless an early lock is purchased |
| Lender type Bridge or debt fund | Usual index SOFR | What widens the spread Higher leverage, business-plan risk, thin track record | When the rate locks Spread fixed at closing; index floats |
| Lender type SBA 7(a) | Usual index Prime or an optional peg rate | What widens the spread Smaller loan size, up to SBA maximums | When the rate locks Variable loans reset with the base rate |
| Lender type SBA 504 debenture | Usual index 10-year Treasury | What widens the spread Set by SBA's increment, not negotiated | When the rate locks When the debenture is priced |
SOFR and term SOFR: daily SOFR, published by the Federal Reserve Bank of New York, is on FRED. Federal rules at 12 CFR part 253 name one-, three-, six- and 12-month CME Term SOFR and 30-day and 90-day Average SOFR as benchmark replacements for legacy LIBOR contracts.
Agency benchmarks: Freddie Mac's floating-rate term sheet (dated 4/26) lists its pricing index as "30-day Average SOFR," and its Index Lock FAQ calls the Treasury index "the most volatile part of the coupon" on a fixed loan.
Treasury yields and prime: the 2-, 5- and 10-year yields and the bank prime rate are on FRED, drawn from the Fed's H.15 release.
FHLB advances: the Federal Housing Finance Agency describes advances from the 11 regional Federal Home Loan Banks as priced over comparable Treasuries, so the Treasury curve is the best public read on a bank's fixed-rate funding.
SBA 504: the SBA says 504 rates are "pegged to an increment above the current market rate for 10-year U.S. Treasury issues."
Where do the commercial loan benchmarks stand in October 2026?
On October 16, 2026, the latest date with both readings, FRED put SOFR at 3.88% and the 10-year Treasury at 5.09%, so before any spread is added, a loan priced over the 10-year starts 1.21 percentage points above a loan priced over SOFR. A year earlier the order was reversed.
Dated rate tape from FRED (observation date beside each figure):
SOFR (FRED series SOFR): 3.87% on October 19, 2026; 3.88% on October 16, 2026; 4.30% on October 16, 2025.
2-year Treasury (DGS2): 4.74% on October 16, 2026; 3.41% on October 16, 2025.
5-year Treasury (DGS5): 4.89% on October 16, 2026; 3.55% on October 16, 2025.
10-year Treasury (DGS10): 5.09% on October 16, 2026; 3.99% on October 16, 2025.
Bank prime rate (DPRIME): 7.00% on October 13, 2026, up from 6.75% on September 16, 2026; 7.25% on October 16, 2025.
What moved, our arithmetic: from October 16, 2025 to October 16, 2026, SOFR fell 0.42 points while the 10-year Treasury rose 1.10 points and the 2-year rose 1.33 points.
That is why the index deserves as much attention as the spread. A quarter point negotiated off a fixed-rate spread is smaller than the year's swing in the 10-year, and no lender controls that swing. Prime-based loans reprice in steps: FRED shows prime moving from 6.75% to 7.00% on September 17, 2026, and variable loans tied to it reset at their next adjustment date.
Current levels by loan product are on our rates page, and commercial real estate loan rates in 2026 tracks them by loan type.
What makes a lender widen or tighten the spread on your loan?
Lenders widen the spread when a loan carries more risk or less flexibility for them, so higher leverage, thinner coverage, a weaker property type, a lighter sponsor, a longer fixed term, waived recourse and easy prepayment all cost basis points, while real competition between lenders for the same file tightens it.
Leverage: CRE Daily, reporting a Q1 2026 debt capital markets survey on May 28, 2026, said lower-leverage floating-rate senior loans averaged spreads of 267 basis points over SOFR while higher-leverage floating loans tightened to 348 basis points. That is an 81-basis-point gap over the same index (our arithmetic).
Property type: CRED iQ loan data published by Commercial Observer on April 20, 2026 put spreads over the 10-year Treasury on 60% to 65% loan-to-value permanent loans at 154 basis points for multifamily, 162 for industrial, 176 for retail and 220 for office as of March 31, 2026.
Lender channel: the same article put CMBS conduit 10-year pricing near 250 basis points over the benchmark and life company 10-year quotes at roughly 170 basis points at 50% to 65% loan-to-value.
Illustrative coupon, our arithmetic: the 10-year at 5.09% (October 16, 2026) plus the 154-basis-point March 31 multifamily spread is about 6.63%; plus the 220-basis-point office spread, about 7.29%. The dates differ, so this illustrates the mechanism, not a quote.
Coverage and debt yield: lenders test net operating income against the payment (DSCR) and the loan amount (debt yield). Freddie Mac's fixed-rate term sheet (dated 4/26) pairs a 1.25x minimum amortizing coverage with 80% maximum LTV on a 7-year term, but caps full-term interest-only loans at 65%.
Sponsor, term and recourse: liquidity, net worth and a track record with the property type are underwriting inputs; a longer fixed period keeps the lender exposed longer; and dropping a personal guarantee shifts risk to the bank. Each is usually priced, so compare one lender's 5-, 7- and 10-year quotes.
Prepayment flexibility: Freddie Mac's fixed-rate sheet sets yield maintenance until securitization, then a 2-year lockout and defeasance, and says "Yield maintenance without defeasance is available for securitized loans at an additional cost." Flexibility is a priced feature.
Competition: in the Federal Reserve's April 2026 Senior Loan Officer Opinion Survey, the most widely reported changes in CRE terms over the past year were higher maximum loan sizes, narrower spreads over the bank's cost of funds and longer interest-only periods, and the most cited reason for easing was "more aggressive competition from other banks or nonbank lenders." The July 2026 survey found net shares of banks easing standards on nonfarm nonresidential and multifamily loans in the second quarter.
Why are two quotes at the same headline rate not the same loan?
Two quotes at the same headline rate can cost very different amounts because the coupon is only one line: origination fees, the interest accrual basis, amortization, any interest-only period, prepayment terms and the date the rate actually locks all change what you pay and how much you can borrow.
Freddie Mac's fixed-rate term sheet lists "Actual/360 standard; 30/360 available" as its amortization calculation. On an actual/360 loan, interest accrues for 365 days at 1/360 of the annual rate, so a 6.50% note costs about 6.59% a year in interest (our arithmetic: 6.50 times 365, divided by 360).
Worked example, hypothetical: a $5,000,000 loan at 6.50% against $500,000 of net operating income, 10-year term, repaid after five years. Illustrative numbers, not a quote.
Quote A: 6.50%, 30/360 accrual, 30-year amortization, 0.50% lender origination fee. Annual debt service $379,241, coverage 1.32x, and an effective annual cost of about 6.62% over the five-year hold once the fee is netted from proceeds (our arithmetic).
Quote B: 6.50%, actual/360 accrual, 30-year amortization, 1.50% lender origination fee. The accrual basis and extra point lift the effective annual cost to about 6.96% over the same hold (our arithmetic), about a third of a point more.
Same 6.50%, 25-year amortization: annual debt service rises to $405,124 and coverage falls to 1.23x, which can fail a 1.25x minimum that the 30-year version passes.
Same 6.50%, interest-only: payments drop to $325,000 a year and coverage reads 1.54x, but Freddie Mac's term sheet says interest-only coverage "uses an amortizing payment."
Line every quote up on one sheet: index and its date, spread, accrual basis, amortization, interest-only months, fees, prepayment and lock terms. Our guide to comparing commercial loan terms across lenders walks through the full side-by-side, and the amortization schedule calculator shows the payment and balloon for each structure.
When is a commercial loan rate actually fixed rather than indicative?
A commercial loan rate is fixed only when the lender executes a rate lock or commitment in writing, usually against a good faith deposit; until then a term sheet rate is indicative, and on a floating loan the lock covers the spread while the index keeps resetting with SOFR.
Agency standard delivery: Freddie Mac's Index Lock FAQs (May 2025) say that "in the absence of an Index Lock, the Treasury index and spread will be locked concurrently at rate-lock," and that a borrower on the standard delivery process will "know their all-in rate at commitment."
Index Lock: the same FAQ says eligible borrowers can lock "the most volatile part of the coupon (the Treasury index)" any time after a signed application is delivered, with the spread locked later, and that the spread "may adjust based on changes to loan terms, property, borrower or certain loan document modifications."
Early rate-lock: Freddie Mac's early rate-lock sheet (May 2025) says borrowers can lock the rate on a fixed-rate mortgage "or the spread for a floating-rate mortgage" within two to five days after the preliminary underwriting review.
Lock period: Fannie Mae's Multifamily Guide limits the rate lock period to 180 days for a fixed-rate loan and 45 days for an adjustable or structured adjustable loan.
Good faith deposit: the same chapter sets a minimum deposit of 1% of the rate lock amount for locks of $9 million or less held 90 days or less, 2% above $9 million, and 3% for any lock longer than 90 days and up to 180 days, in a section titled "Good Faith Deposit and Breakage Fees."
Banks, CMBS and bridge lenders: the commitment letter is the rule. Ask which index and tenor, on what date it is set, and what breaking the lock costs.
How do you get a commercial real estate loan placed at the tightest spread your file supports?
The most direct route is a commercial mortgage brokerage that puts one complete file in front of several lender types at once, because the market sets the index and the spread tightens only when lenders price the same loan against each other, the competition the Fed's April 2026 survey cites for easier CRE terms.
1. YieldStack (our top pick, and the publisher of this guide): YieldStack is an AI-native commercial mortgage brokerage that arranges financing for commercial real estate investors. Software matches the file against 20,000+ loan programs; human brokers structure the deal, negotiate the spread, fees and lock terms on the borrower's side, and carry it toward closing. The process starts with a 5-minute submit, with a median first offer in under an hour, from an institutional lender.
Who "our" means: YieldStack publishes this guide, and placing it first is our editorial pick for AI-native commercial mortgage brokerage, not an independent ranking.
Selection criteria: quotes from more than one lender type on one file, borrower-side negotiation, and a disclosed fee paid only at closing.
2. Going lender by lender: you can ask a relationship bank, an agency lender and a bridge lender directly, but you run every negotiation yourself, and each lender prices only against what it can see.
Either way, insist on: every quote stated on the same index date, accrual basis, amortization and fee basis.
It costs Zero upfront to submit a deal and review offers; YieldStack's broker fee is 0.50–1.00% of the loan amount and is paid only at closing. Every credit decision is made by the lender; YieldStack arranges the introductions and negotiates on the borrower's side, and no loan, rate, or closing is guaranteed. YieldStack arranges commercial real estate financing nationwide.
Send your deal for side-by-side lender quotes
The bottom line
A commercial real estate loan rate is an index plus a spread. Read the index on FRED with its date, make lenders compete on the spread, fees, accrual, amortization and prepayment, and treat every rate as indicative until it is locked in writing. YieldStack, the publisher, is our top pick for AI-native commercial mortgage brokerage when you want several lender types pricing the same file.