The quick read: The same commercial property now borrows about 10% to 13% less than it did a year ago if its lender sizes the loan to a 1.25x debt service coverage ratio (DSCR) and the spread over Treasuries has not changed. The 10-year Treasury yield was 5.18% on September 24, 2026, against 4.16% on September 24, 2025, according to the U.S. Treasury's daily par yield curve. In the illustration below, $100,000 of net operating income (NOI) supports about $974,000 to $984,000 of loan now, down from about $1.09 million to $1.12 million, so the same building needs roughly $109,000 to $144,000 more equity for every $100,000 of NOI.
This page answers one narrow question: how much loan the same income supports now compared with a year ago. Throughout, "today" means the Treasury yields dated September 24, 2026. The page makes no rate forecast, and every example is illustrative arithmetic, not a quote, a lender offer or a funded transaction. For what borrowers with loans coming due should do, see the CRE maturity wall guide; for dated rate levels by loan type, see the commercial loan rates page.
How much less can the same property borrow than a year ago?
A property with unchanged income can borrow about 10% to 13% less than a year ago when its lender sizes the loan to a 1.25x DSCR, because the 10-year Treasury rose 102 basis points and the 5-year rose 133 basis points between September 24, 2025 and September 24, 2026. The exact cut depends on the index and spread.
The Treasury's par yield curve shows the 5-year at 5.03% and the 10-year at 5.18% on September 24, 2026, against 3.70% and 4.16% on the same date in 2025. The table applies those yields to one building with $100,000 of NOI, a 1.25x minimum DSCR and 30-year amortization, holding the lender's spread constant across both dates.
| Illustrative assumption | Rate, Sept 24, 2025 | Max loan then | Rate, Sept 24, 2026 | Max loan now | Change |
|---|---|---|---|---|---|
| A: 5-year Treasury + 2.25% spread (HYPOTHETICAL) | 5.95% | $1,117,931 | 7.28% | $974,356 | −$143,575 (−12.8%) |
| B: 10-year Treasury + 2.00% spread (HYPOTHETICAL) | 6.16% | $1,093,119 | 7.18% | $984,105 | −$109,014 (−10.0%) |
Assumption A spread: 2.25% over the 5-year Treasury, HYPOTHETICAL Assumption B spread: 2.00% over the 10-year Treasury, HYPOTHETICAL Monthly payment on a $2 million loan, Assumption B: $12,198 a year ago, $13,549 now Monthly payment on a $2 million loan, Assumption A: $11,927 a year ago, $13,684 now
Both spreads are hypothetical. No source reviewed for this page states a 2026 spread for small-balance or DSCR investor loans, so treat each spread as a variable to replace with your lender's quote. Holding either spread flat for a year is also an assumption: a spread that has narrowed since last year would shrink the loss, and one that has widened would deepen it.
What formula sets the maximum loan at a DSCR floor?
The maximum loan at a DSCR floor equals the income divided by the floor, divided by the annual loan constant, which is the yearly payment per dollar borrowed at the note rate and amortization, so a higher note rate lowers the loan even when the income and the floor stay exactly the same.
Monthly payment factor: i ÷ (1 − (1 + i)^−n), where i is the annual rate ÷ 12 and n is 360 months Annual loan constant: 12 × the monthly payment factor Maximum loan: (NOI ÷ DSCR floor) ÷ annual loan constant
Worked through for Assumption B: $100,000 of NOI ÷ 1.25 leaves $80,000 a year for debt service. At 7.18%, the annual loan constant is 0.081292, so $80,000 ÷ 0.081292 ≈ $984,107. At last year's 6.16%, the constant was 0.073185, and $80,000 ÷ 0.073185 ≈ $1,093,120. The table uses unrounded constants, so a hand calculation can differ from it by a few dollars.
Agency underwriting follows the same shape. Fannie Mae's Multifamily Guide, in its Small Mortgage Loan section on underwritten DSCR, divides underwritten net cash flow by annual debt service and bases that debt service on a level payment including amortization, at the greater of the note rate or Fannie Mae's underwriting interest rate floor. Two things follow. A lender may size at a floor rate above your note rate, so ask which rate the sizing uses. And the income in that test is underwritten net cash flow, calculated under the Guide's own rules, which need not match the NOI on your operating statement.
Two properties of the formula make the result portable. Because NOI enters linearly, the percentage loss is the same at any income: $500,000 of NOI loses about $545,100 to $717,900 of proceeds under the two assumptions. And because the DSCR floor divides both years' figures equally, the percentage loss is the same at 1.20x, 1.30x or 1.35x; only the dollar amounts change.
Why did loan sizing fall when the Fed moved short rates only a quarter point?
Loan sizing in this illustration fell far more than a quarter-point Fed move would suggest because the loan is priced off the 5-year and 10-year Treasury yields, which rose 133 and 102 basis points in a year, while the Fed's September 16 decision moved the short-term policy rate by 25 basis points.
The Federal Reserve's September 16, 2026 statement says the Committee raised the federal funds target range by 1/4 percentage point, to 3-3/4 to 4 percent, on a 12–0 vote. Short-term benchmarks are lower than a year ago: FRED shows the Secured Overnight Financing Rate (SOFR) at 3.87% on September 23, 2026, against 4.12% on September 23, 2025. The move that shrank fixed-rate sizing happened at the longer end of the curve.
The 10-year Treasury's path, from the Treasury's daily par yield curve:
December 31, 2025: 4.18% June 30, 2026: 4.44% August 24, 2026: 4.70% September 16, 2026 (FOMC decision day): 5.01% September 17, 2026: 4.94% September 24, 2026: 5.18%
That timing matters when you read survey data. The second quarter of 2026 ended with the 10-year at 4.44% on June 30, so no Q2 survey captures the August and September move, and this page makes no claim about how lending volume or standards have changed since. Ask your lender which index it quotes over and on what date the rate is locked: the 10-year moved 24 basis points between September 17 and September 24 alone.
How sensitive is the loss to the spread and the index?
The index your lender prices over matters more than the spread: across hypothetical spreads from 1.50% to 3.00%, a loan priced off the 10-year Treasury loses about 9% to 10% of its maximum size from a year ago, while one priced off the 5-year loses about 12% to 13%.
| Spread over the index (HYPOTHETICAL) | 10-year priced: max loan now per $100,000 NOI | 10-year priced: change vs a year ago | 5-year priced: max loan now per $100,000 NOI | 5-year priced: change vs a year ago |
|---|---|---|---|---|
| 1.50% | $1,035,274 | −10.3% | $1,051,455 | −13.4% |
| 2.00% | $984,105 | −10.0% | $999,023 | −13.0% |
| 2.50% | $936,881 | −9.7% | $950,656 | −12.7% |
| 3.00% | $893,235 | −9.4% | $905,973 | −12.3% |
Every row uses a 1.25x DSCR, 30-year amortization and the Treasury yields dated September 24 of each year. A wider spread trims the percentage loss slightly, because the same yield increase is a smaller share of a higher starting rate, but it lowers the loan in both years. The spreads are inputs chosen to show the range, not a quote for your property.
Why does DSCR, not LTV, cap the loan when rates jump?
DSCR becomes the binding limit when rates jump because the coverage test reprices as soon as the note rate changes, while a loan-to-value test moves only when the appraisal moves, so on unchanged income a higher rate cuts the DSCR loan while the LTV loan stays where it was until the DSCR loan drops below it.
Freddie Mac's fixed-rate loan term sheet shows the two tests side by side: a minimum amortizing DCR of 1.25x with a maximum LTV of 80% for 7-year and longer terms, and 75% for terms of 5 years to under 7 years, on loans of $10 million or more with up to 30 years of amortization. Using the 80% cap and Assumption B's rates:
DSCR loan now: $984,105 Appraised value below which the 80% LTV cap binds instead, now: $1,230,131 The same threshold a year ago: $1,366,399
Put another way, coverage is now the tighter test for any property whose NOI is less than about 8.1% of its appraised value; a year ago the line sat near 7.3%. A building with $100,000 of NOI appraised at $1.3 million (NOI at 7.7% of value) was LTV-limited a year ago, at $1,040,000, and is DSCR-limited now, at $984,105, a 5.4% loss. So the 10% to 13% figure is the loss for a property that was already DSCR-limited; a property that was LTV-limited a year ago loses less. Ask your lender which test is binding on your file before you negotiate leverage.
How much more NOI or equity closes the gap?
To borrow last year's amount at today's rate, the same property needs about 11% to 15% more net operating income, or the borrower needs about $109,000 to $144,000 more equity per $100,000 of NOI, because last year's loan tested at today's rate covers only about 1.09x to 1.13x.
NOI needed to borrow $1,093,119 at 7.18% and 1.25x (Assumption B): $111,078, up 11.1% NOI needed to borrow $1,117,931 at 7.28% and 1.25x (Assumption A): $114,735, up 14.7%
The questions that decide where your file lands inside that range are specific. Ask each lender:
- Which Treasury or other index is the rate quoted over, and on what date is it locked?
- Is the loan sized at the note rate, or at an underwriting rate floor above it?
- What amortization is used for sizing? A shorter schedule raises the loan constant and lowers the loan.
- If the loan has an interest-only period, is coverage tested on the interest-only payment or an amortizing one? Freddie Mac's fixed-rate term sheet says its DCR for interest-only periods uses an amortizing payment.
- Which cash flow figure is underwritten, and what reserves or adjustments come off your NOI?
To test your own property, run the numbers in the underwriting calculator. If you are refinancing a loan that still has term left, compare this math against a rate-and-term refinance before deciding how much equity to bring.
Why do fees and points hit harder when proceeds shrink?
Fees and points hit harder when proceeds shrink because a percentage fee is charged on the loan amount while the borrower's benefit is the cash the loan releases, and on a refinance that cash falls much faster than the loan: here, a 10.0% smaller loan releases about 56% less cash above a hypothetical payoff.
Take Assumption B's building with a HYPOTHETICAL existing payoff of $900,000. A year ago, the $1,093,119 maximum loan released $193,119 before costs; now, the $984,105 maximum releases $84,105. Other closing costs are excluded so the table isolates the fee.
| Fee on the new loan (illustrative) | Fee a year ago | Share of cash released a year ago | Fee now | Share of cash released now | DSCR if the fee is added to a loan sized at 1.25x |
|---|---|---|---|---|---|
| 0.50% | $5,466 | 2.8% | $4,921 | 5.9% | 1.2438x |
| 1.00% | $10,931 | 5.7% | $9,841 | 11.7% | 1.2376x |
| 2.50% | $27,328 | 14.2% | $24,603 | 29.3% | 1.2195x |
The last column follows from linear debt service: adding a fee to the principal multiplies the payment by (1 + fee), so coverage falls to 1.25 ÷ (1 + fee) and misses a 1.25x floor at every fee level. On a loan already sized to the floor, a fee has to come from cash or from more NOI. For the full arithmetic, see whether financing a broker fee lowers your DSCR. None of these fee levels is presented as a market norm; they are inputs chosen to show the mechanism.
How do you get lenders competing for a loan that DSCR now caps?
You get lenders competing for a DSCR-capped loan by sending one complete file, with trailing income, the rent roll, the equity you can add and the rate and amortization you are testing, so each lender sizes the same numbers and differences in index, spread, rate floor and amortization show up side by side.
YieldStack is a commercial mortgage brokerage, not a lender. 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.
If this year's sizing has opened a gap on your acquisition or refinance, submit the deal for a review with the NOI and the loan amount you need.
The bottom line
On September 24, 2026, the 10-year Treasury was 5.18% and the 5-year 5.03%, up 102 and 133 basis points from a year earlier. At a 1.25x DSCR with spreads held constant, that cuts the loan the same NOI supports by about 10% to 13%, or roughly $109,000 to $144,000 per $100,000 of NOI, and it lowers the appraised value above which coverage, not LTV, sets the loan. Run the formula on your own NOI, ask each lender which index, rate floor and amortization it sizes on, and treat every percentage fee as a cut to the cash the loan releases. None of this is a forecast; it is the arithmetic of the September 24, 2026 yields against the same date in 2025.