Commercial real estate remains a popular asset class for investors seeking long-term income and portfolio diversification. In 2026, understanding commercial mortgage rates for investment property is essential for evaluating deals, managing risk, and maximizing returns.
Unlike owner-occupied commercial properties, investment properties are financed primarily based on income potential, market conditions, and investor experience. As a result, mortgage rates and terms can vary significantly.
What Is a Commercial Mortgage for Investment Property?
A commercial mortgage for an investment property is a loan used to purchase or refinance income-producing real estate that is not owner-occupied. These loans are designed for properties that generate rental income or lease revenue.
Common investment property types include:
- Multifamily apartment buildings
- Retail shopping centers
- Office buildings
- Industrial and warehouse properties
- Mixed-use commercial real estate
Commercial Mortgage Rates for Investment Property in 2026
In 2026, commercial mortgage rates for investment properties generally fall within the following ranges:
- Bank commercial mortgages: ~6.75% – 9.25%
- CMBS loans: ~6.75% – 9.75%
- Agency multifamily loans: ~6.25% – 8.75%
- Bridge loans: ~8.5% – 12%+
- Private and hard money loans: 10%+
Actual rates depend on the borrower’s financial profile, property cash flow, and overall market conditions.
Key Factors That Affect Investment Property Mortgage Rates
Lenders evaluate several risk factors when pricing commercial mortgages:
- Debt Service Coverage Ratio (DSCR): Strong rental income lowers rates
- Loan-to-Value (LTV): Lower LTV results in better terms
- Property type: Multifamily often receives the lowest rates
- Borrower experience: Experienced investors receive better pricing
- Market location: Strong local markets attract lower rates
In 2026, lenders place greater emphasis on stabilized income and tenant quality.
Fixed-Rate vs Variable-Rate Commercial Mortgages
Investors can choose between fixed and variable rate structures:
- Fixed-rate mortgages: Provide predictable payments and protection from rate increases
- Variable-rate mortgages: Often start lower but fluctuate with market benchmarks
Fixed-rate loans are popular among long-term investors, while variable rates are often used for shorter investment horizons.
Down Payment and Loan Terms for Investment Properties
Commercial mortgages for investment properties typically require:
- Down payments of 25% – 35%
- Loan terms of 5 – 30 years
- Balloon payments in some cases
Stronger properties with stable income may qualify for higher leverage and longer terms.
Types of Commercial Mortgages for Investors
1. Bank Commercial Loans
Traditional banks offer competitive rates but strict underwriting.
- Lower interest rates
- Recourse often required
- Longer approval timelines
2. CMBS Loans
CMBS loans are common for larger stabilized investment properties.
- Non-recourse options
- Fixed interest rates
- Prepayment penalties may apply
3. Agency Multifamily Loans
Agency loans backed by government-sponsored enterprises are popular for apartment properties.
- Highly competitive rates
- Long amortization periods
- Strict property requirements
4. Bridge and Transitional Loans
Used for properties undergoing renovation or lease-up.
- Fast access to capital
- Higher interest rates
- Short-term financing
How to Get the Best Commercial Mortgage Rates in 2026
Investors can improve their financing terms by:
- Increasing property occupancy and net operating income
- Reducing leverage and lowering LTV
- Providing detailed financial and rent roll documentation
- Choosing stable property types
- Working with experienced commercial mortgage brokers
Strong preparation can significantly reduce borrowing costs over time.
Risks Investors Should Consider
Before securing a commercial mortgage, investors should evaluate:
- Interest rate fluctuations
- Tenant vacancy and turnover risk
- Refinancing risk at maturity
- Market downturns
Stress-testing cash flow against higher rates helps protect long-term returns.
Conclusion
Commercial mortgage rates for investment property in 2026 reflect both market uncertainty and strong demand for income-producing real estate. While rates vary by property type and borrower strength, investors who understand lender expectations and market dynamics can still secure competitive financing.
By choosing the right loan structure and lender, investors can optimize cash flow, protect equity, and build long-term wealth through commercial real estate.