Borrowers are constantly trying to determine what's happening with commercial loan prices. The answer to this question is totally scattered. We're seeing rates come in on precisely the exact same loan request with a 200 – 400 basis point difference.
And what we're discussing here is loans less than five million and no multifamily. Plain old retail, industrial, office, etc., which are either leased out to a "mom and pop" or are inhabited by the debtors business.
Commercial loan rates currently range from 4.75% to 7.5 percent for the majority of deals. This is obviously a massive variety and I want to explain the 4.75%. This is just at a quarterly adjustable speed. Normally tied to Prime, which as of this writing is at 3.25%.
Additionally, this is just for owner-occupied properties. For owner occupants that want a fixed rate, meaning 3 -5 decades, they ought to wind up being in the mid 6% to 7 %s.
This comes as a shock too many borrowers that are listening to the media talk how low residential rates are. Commercial rates generally are up by 200 basis points or more than residential counterparts and receiving fixed rates is becoming more challenging on a weekly basis. Many banks are top with flexible rates using a "take it or leave it" attitude.
Investment properties are an entirely different story. On this side of the company, the actual carnage is beginning to show itself. Rates aren't even questions. It is really "will this loan really close." Will it truly fund?