Are commercial loans cheaper than residential?
I am eyeing a ten-unit complex and got a quote from a lender at 8.5%. I talked to a friend and he told me he was getting rates at 5.5%. The SFH market in our area has rates ranging from 6 to 7.5%. Is commercial lending cheaper nowadays? Aren’t commercial loans higher than residential due to the higher risk lenders take on? by dobeyjr376 from Bridgeport, Texas. Jul 19th 2022
Joe Metzler (JoeMetzler)
#17 ranked lender in Minnesota - 4,848 contributions
There are way to many variables missing to give you any sort of accurate answer. Traditional financing, like the everyday common 30-year fixed rate mortgage does not offer financing on properties larger than 4-units, so you can't even compare those. Even if it was just a four-unit property, those rates are higher than single family properties, and tend to run =/- about 1.5% higher than the standard 30-yr fixed. As this is 10-unit, anything you would be getting is a commercial loan. I lend for standard properties, and up to 30-unit apartments in MN, WI, IA, ND, SD. Find me at JoeMetzler.com, Cambria Mortgage, NMLS 274132
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