The number everyone is watching
The ten-year Treasury closed at 5.242 percent on 12 October (CRE Daily, 13 Oct 2026) and 5.19 percent on 14 October (CRE Daily, 15 Oct 2026). Borrowers asking for quotes are, understandably, sorting them by rate.
Rate is the easiest number to sort by. It is also the number that tells you least about what the loan costs you, because it ignores two things: what you pay to get it, and how long you keep it.
Two quotes on one deal
Take a $5 million loan with a 25-year amortization. Both quotes below are illustrative, and the payment is the standard monthly annuity formula, PMT = P x i / (1 - (1 + i)^-n), with i the monthly rate and n = 300.
| Quote A | Quote B | |
|---|---|---|
| Rate | 6.25% | 6.75% |
| Origination fee | 1.00% ($50,000) | 0.25% ($12,500) |
| Monthly payment | $32,983 | $34,546 |
| Annual debt service | $395,802 | $414,547 |
Quote A saves $18,745 a year in payments. Quote B saves $37,500 up front in fees. Divide one by the other and Quote A takes 2.0 years to pay back its higher fee.
Hold the loan for five years and Quote A is clearly the better quote. Sell in 18 months, or refinance when rates fall, and Quote B was. The same two quotes, ranked in opposite orders by one assumption the rate column never shows.
Four things the rate column hides
- Fees. Origination, lender legal and any exit fee all move the real cost. Ask for them as a dollar figure, next to the payment.
- Prepayment structure. A lower rate with yield maintenance behaves very differently from a higher rate with a step-down if you leave early.
- Recourse and amortization. Both change what the loan is worth to you and what you can do with the property.
- Expiry. A quote that expires in a week and one that holds for a month are not the same offer in a market that moves.
How to compare in practice
For the full side-by-side method, start with how to compare commercial loan quotes side by side. Then put the quotes next to each other with the same fields filled in for each, then answer one question before you answer any other: how long will I realistically hold this loan? The breakeven above is a floor, not a forecast. If you plan to sell or refinance before it, lead with the lower fee.
This is the reason Finance Lobby shows competing quotes side by side on one deal, with the same terms in the same order, instead of in separate PDFs. Pull your numbers from the current commercial loan rates before you compare, and find lenders whose criteria fit the deal so the quotes you compare are the ones that can actually close.
Finance Lobby is the all-in-one CRE financing platform: underwrite the deal, build the deal memo, pull comps, manage documents, reach lenders and compare their quotes in one place.
Sign Up and compare your first quotes side by side
FAQ
Is a lower rate or a lower fee better on a commercial loan? Neither wins on its own. Compare total cost over the period you expect to hold the loan: rate, upfront fees, prepayment structure, recourse, amortization and expiry. A lower rate only wins if you hold long enough to earn back a higher upfront fee.
What is a breakeven when comparing loan quotes? The number of years it takes the lower-rate quote's payment savings to repay its higher upfront fee. In our illustrative example it is the fee difference ($37,500) divided by the annual payment difference ($18,745), about 2.0 years.
Is the lowest rate always the best commercial loan quote? No. If you sell or refinance before the breakeven, a quote with a higher rate and a lower fee costs less. Prepayment terms can change the answer again.
Are the numbers in this article actual lender offers? No. They are illustrative. The formula is stated so you can rerun it with your own quotes.