Interest Rates on Commercial Mortgage Loans Have Fallen Sharply

No data was found

Interest rates in general have fallen sharply by 25-35 basis points in recent days. This reduction in interest rates offers owners of both “owner occupied” and “investment” properties the opportunity to lock in a favorable rate on either a new purchase or refinancing of an existing mortgage loan.

Lenders have been aggressive in seeking out new loan opportunities, particularly in the owner occupied commercial real estate market, and are offering low rates and longer amortization periods to attract new loans.

In fact, a number of lenders have opened their portfolios to investment properties, offering attractive terms, including relatively low rates and long amortization periods. In some cases, the permitted loan to value can be up to 85 percent.

Many borrowers who borrowed 5-10 years might be near the end of that term and facing the requirement to refinance into a new loan. These borrowers might find it attractive to refinance into a new loan with longer maturity to:

Lock in a new, lower rate for a longer period of time
Eliminate concerns about refinancing again in the next few years
For example, presently available interest rates on owner occupied properties are as low as 3.85 percent for a loan having a 7-year term and up to 20-year amortization and, on an investment property, a rate of 4.35 percent and an amortization of up to 25 years. In both cases, a loan to value of up to 85 percent is available.

An example of one of these alternatives for an owner occupied property is:

Lowering the monthly payment –

Original Mortgage Re-Financed Mortgage
Amount $1,500,000 $1,252,756
Interest Rate 5.25% 3.85%
Amortization (yrs) 20 20
Term (yrs) 7 7
Monthly Payment $10,107.66 $7,492.80
Monthly Savings $2,614.86
Annual Savings $31,378.32

If there is an interest in evaluating your individual situation, whether owner occupied or investment property, contact Stephen Barnett, Managing Partner of WhiteKnight Solutions, at 561.953.1421 or [email protected]

No data was found

Latest Blog Posts

Person using credit card for online shopping

The Wayfair Decision Impacts More Than Sales Tax

The ripple effect of the landmark Wayfair decision (“South Dakota vs. Wayfair”) continues to confound CFO’s, accountants, and financial analysts throughout the US. In Part One of our series on the evolution of multi-state tax

Read More
Person using calculator

Year-End Tax Planning for Calendar Year 2021

Executive Summary Year-end tax planning not only provides an estimate of your 2021 tax liability, it can also reveal opportunities to lower your overall tax liabilities!  For cash basis taxpayers, defer income and accelerate expenses,

Read More

We are pleased to announce that the Daszkal Bolton team has joined CohnReznick, effective March 1.