Commercial Mortgage Rates Decrease Substantially

March 22, 2011 - PRLog -- Commercial mortgage rates have dipped substantially from just 3 weeks ago.  The decrease is a result of both banks margins tightening, as well as the underlying indexes dropping.   Rates for conventional commercial mortgages have dropped by 40 to 50 basis points.

“This is very good news for borrowers.  Reduction in interest rates doesn’t just mean lower payments for borrowers; it also means that transactions that were on the fence from a cash flow position can now get done as the lower payments make it easier for borrowers to meet the required debt coverage ratios.”  Comments Jeff Rauth, President.  

See our commercial mortgage rates here:  http://www.cfa-commercial.com/commercial-loan-rates.html

“The tightening of banks margins is perhaps the best news out there.  This means that banks are actively competing for new deals and are trying to win them by lowering their interest rates.”  Continues Rauth.   “It proves that they want to lend.  This will be very telling in the CMBS (commercial mortgage backed securities) market in 2011.  We have already started to see a slight drop in margins on this side of the business.  Pre credit crisis margins were 1.5% – 2.25% over indexes, now 4% over is common.  If or when we get back to 2% over, the market will likely be cured.”

Commercial mortgage rates have dropped by .5% in the last couple of weeks.  Current rates on a 5 year fixed loan, with a 25 year amortization schedule, for a borrower with a 725 credit score, general purpose building (such as retail, office, or industrial) and loan amount over $1,000,000 can be as low as 5.25%.    

http://www.cfa-commercial.com/SBA_504_commercial_loan.html

Commercial Finance Advisors, Inc focuses on commercial mortgages below $10,000,000 nationwide.  It does both conventional commercial loans as well as SBA and USDA B & I loans.  Go to their website for additional information.   http://www.cfa-commercial.com