Author Topic: Commercial loan rate?  (Read 566 times)

iris lily

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Commercial loan rate?
« on: August 18, 2018, 08:48:38 PM »
What is a typical commercial loan rate today?

Our not for profit neighborhood association wants to buy a commerciak building nearby, and I assume we would have to oay a commercial rate.

Michael in ABQ

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Re: Commercial loan rate?
« Reply #1 on: August 18, 2018, 09:13:08 PM »
It really depends on the asset and the borrower. It could be as low as 4-5% but the amortization period might only be 20-25 years instead of the 30 years that's more typical with residential loans. Also, almost all commercial loans have a 10-year call so you have to refinance within 10 years or pay off the remaining balance with a balloon payment. I've seen a few fully amortizing commercial loans, but not many. In general it's going to be higher than a comparable residential mortgage by 50-100 basis points.

sammybiker

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Re: Commercial loan rate?
« Reply #2 on: August 19, 2018, 07:52:03 AM »
What @Michael in ABQ said.

I'm seeing a lot of 5.25-5.5% for 5 yrs, 25 yr am.  But it's very local and depends on what the situation is at that specific bank.

I would recommend you call a few of your local credit unions, ask to speak with their commercial lending department and just ask what they are offering.  They will tell you simply over the phone or via e-mail.

iris lily

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Re: Commercial loan rate?
« Reply #3 on: August 19, 2018, 07:41:26 PM »
Thanks for these replies, folks.

Michael in ABQ

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Re: Commercial loan rate?
« Reply #4 on: August 19, 2018, 08:49:36 PM »

I would recommend you call a few of your local credit unions, ask to speak with their commercial lending department and just ask what they are offering.  They will tell you simply over the phone or via e-mail.


In my area there's just a handful of credit unions that have commercial lending departments but they typically offer pretty good rates compared to some big national lender like Wells Fargo or BofA. The credit union I do most of my personal banking with has basically no business/commercial department - another one in town that's similar size focuses very heavily on commercial lending. However, their focus is also towards investors with cash flowing properties, not an owner-user type property which seems to be what you're looking for. Everyone is hungry for business though so it shouldn't be hard to get a ballpark quote over the phone.