Greetings everyone,
This question is directed to any\all with a commercial loan.
I’m doing research for a business plan and I would like to know what the average interest rate that people are seeing with decent, to AAA credit in our current economy. I’m guessing that rates are round 7.5% - 8.0% Is this correct?
Thanks all.
I closed a deal at 7.25% about 2 weeks ago. That was before the 1.25% drop by the Fed, but I’m not sure how much lower the commercial rate has dropped since then.
Good Luck,
Mike
I would do any projections/plans at 8% and here’s why. Eventhough you can probably get a comm. loan at say 7.25-7.5, the bank/lender/investor likes to see that you are being conservative in your numbers and still coming up with good results. I’ve found that you are always better to overestimate your expenses/cost and underestimate your income/sales. That way anything you make over that is just gravy.
So you know, prime as of today is 6%
There are too many variables involved in commercial lending to give you a accurate response.
Things like loan size, LTV required, DSCR, amortization schedule, property type, etc., ultimately will impact the final I/R.
Here are two references on loans that I locked this week that might shed some light on the matter (both properties were MFH units):
- 7 YR ARM-30 YR Amortization-80 LTV-1.20 DSCR @ 5.19%.
- 30 YR Fixed-30 YR Amortization-80 LTV-1.20 DSCR @ 6.93%
Hope this helps.
Regards,
Scott Miller
One of other point I neglected to mention—both loan amounts were > 500K.
Regards,
Scott Miller