--- title: Commercial Loans and Fun Blog | Conduit loan pricing description: Conduit loan pricing | George Blackburne, owner, offers insight into the commercial loans and mortgage industry in this Commercial Real Estate Loan Tips blog. --- [![c-loans-logo-2025](https://info.c-loans.com/hs-fs/hubfs/images/c-loans-logo-2025.png?width=183&height=86&name=c-loans-logo-2025.png)](https://c-loans.com) [Terms of Use](https://www.c-loans.com/terms-of-use) | [Disclaimer](https://www.c-loans.com/disclaimer) | [Blog](https://info.c-loans.com/) # Commercial Loans and Fun Blog ## [How Conduit Commercial Loans Are Priced](https://info.c-loans.com/how-conduit-commercial-loans-are-priced) Posted by [George Blackburne](https://info.c-loans.com/author/george-blackburne) on Mon, Jul 8, 2019 - [Tweet](https://twitter.com/share) ![CMBS loans](https://info.c-loans.com/hs-fs/hubfs/CMBS%20loans.jpg?width=210&name=CMBS%20loans.jpg)I have a great training article about commercial loans for you today.  How do conduits price their commercial loans?  After all, commercial lenders cannot buy a forward commitment from Fannie Mae or Freddie Mac, like a residential mortgage banker; yet most commercial loans today are fixed rate loans.  How on earth do the commercial loan officers, working for these big-time commercial lenders, know what to quote?   [![Apply For a CMBS Loan From a Conduit](https://no-cache.hubspot.com/cta/default/37671/116ca97d-7dde-4312-938b-10aa7f64cc5d.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/116ca97d-7dde-4312-938b-10aa7f64cc5d)   ![Embarrassed Son](https://info.c-loans.com/hs-fs/hubfs/Embarrassed%20Son.jpg?width=503&name=Embarrassed%20Son.jpg)   [![Apply For a Commercial Loan to Blackburne & Sons](https://no-cache.hubspot.com/cta/default/37671/34e9010d-6f3b-4979-93c2-9e705da5a9fc.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/34e9010d-6f3b-4979-93c2-9e705da5a9fc)   In a prior training article, I explained that most commercial bankers quote their fixed rate commercial loans at 275 to 350 basis points over five-year Treasuries.  You will recall that a ***basis point*** is 1/100th of one percent, so 300 basis points equals one 3.00%. **Example:** Suppose you call your local commercial bank and speak to a commercial loan officer about a commercial loan.  He will look up [five-year Treasuries](https://www.federalreserve.gov/releases/h15/) and see that on July 3rd, 2019 they stood at 1.74%.  He will then add between 2.75% (275 basis points) and 3.5% (350 basis points) to 1.74% to determine what rate to give you.   Does your client keep more cash on deposit than Fort Knox with his current bank?  If so, in an effort to win your client's deposit accounts, the banker might quote you 4.49% for a ten-year, fixed rate commercial loan, with one rate readjustment at the end of year five.  If your client is a mere mortal, rather than a cash demigod, the bank will probably quote him 5.24%.   [![Nine-Hour Video Training Course How to Broker Commercial Loans](https://no-cache.hubspot.com/cta/default/37671/2fa994cb-f6ac-4671-821f-b4bd48cb5f1f.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/2fa994cb-f6ac-4671-821f-b4bd48cb5f1f)   ![Working](https://info.c-loans.com/hs-fs/hubfs/Working.jpg?width=453&name=Working.jpg)   [![Free SBA Loan Leads](https://no-cache.hubspot.com/cta/default/37671/3d676168-33f5-408a-9680-b5e7a5137fa6.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/3d676168-33f5-408a-9680-b5e7a5137fa6)   But these quotes are from banks.  How would a conduit lender quote his commercial loan?  After all, **conduit loans are usually larger than $5 million**, and the properties are reasonably desirable.  Their rates on commercial loans have to be more attractive than bank loans, right? You will recall that conduits originate commercial loans for the CMBS market.  ***CMBS*** stands for commercial mortgage-backed securities.  Think of a CMBS loan as a huge, fixed-rate, commercial real estate loan written to cookie-cutter standards. CMBS lenders have very little flexibility (that darned cookie cutter), but if you qualify, you get a ten-year, non-recourse, fixed rate commercial loan at a rate that is at least 40 basis points cheaper than what a bank can offer.  When you are talking about a commercial loan of $10 million, 40 basis points is real money. ** In addition, conduit loans are FIXED for the entire ten years!**   **[![Submit Your Loan to 750 Commercial Lenders Using C-Loans.com.  It's Free!](https://no-cache.hubspot.com/cta/default/37671/9f0b2bed-fb9b-455d-b8be-17d8f7960a2a.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/9f0b2bed-fb9b-455d-b8be-17d8f7960a2a)**   **![Converted to Urine](https://info.c-loans.com/hs-fs/hubfs/Converted%20to%20Urine.jpg?width=358&name=Converted%20to%20Urine.jpg)**   **[![Video Course - How To Market For Commercial Loans](https://no-cache.hubspot.com/cta/default/37671/c1051bad-ef5d-4c65-b573-e4432b1769ef.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/c1051bad-ef5d-4c65-b573-e4432b1769ef)**   So when you call a commercial loan officer at a conduit, how does he know what to quote you?  Remember, unlike residential loans, you cannot lock your rate on a commercial loan.  **When you apply for a conduit loan, you have to take the current fixed rate at the moment of closing**, and the process takes at least 75 days.  Every day, from the time of application until the day of closing, your interest rate will change. So I recently asked my good friend, Tom Lawlor at Morgan Stanley, how conduit commercial loans are priced.  Here are his kind answers:   [![Convince a Bank to Join C-Loans Earn Three HUGE Fees!](https://no-cache.hubspot.com/cta/default/37671/e122102d-9a59-45e5-9ecd-7183ad793c26.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/e122102d-9a59-45e5-9ecd-7183ad793c26)   ![Toilet Seat](https://info.c-loans.com/hs-fs/hubfs/Toilet%20Seat.jpg?width=404&name=Toilet%20Seat.jpg)   [![Money Tight?  200-Page Income Property Underwriting Manual - $199](https://no-cache.hubspot.com/cta/default/37671/11407b27-cb27-4ae8-91af-ca91dd4067cc.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/11407b27-cb27-4ae8-91af-ca91dd4067cc)   Q:  Are CMBS loans still quoted based on swap spreads? A:  Conduit loans are quoted as the ***greater*** of (matching) Treasuries or swap spreads, plus an agreed upon margin. ***Swap spreads*** are financial instruments where nervous corporate Treasurers will swap their adjustable rate loans from the bank for a fixed rate loan from some speculator.  Obviously, for taking the risk that interest rates might skyrocket, the speculator makes a handsome profit on the deal.   Swaps spreads change daily, and you can find them [posted here](http://snaprates.com/rates/treasuries_and_swap_spreads).   [![Fee Agreement and Fee Collection Course. Just $199.](https://no-cache.hubspot.com/cta/default/37671/b8c2bde4-6428-433c-85cd-dfd884ff4a2c.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/b8c2bde4-6428-433c-85cd-dfd884ff4a2c)   ![Amish Repo](https://info.c-loans.com/hs-fs/hubfs/Amish%20Repo.jpg?width=472&name=Amish%20Repo.jpg)   [![Dirt Cheap Commercial Leads Choose Type, Size, States, Location](https://no-cache.hubspot.com/cta/default/37671/5cb4ca00-2cc5-4cbd-a3f7-6e2d89bc5bf9.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/5cb4ca00-2cc5-4cbd-a3f7-6e2d89bc5bf9)   **Example:** Your client is seeking a $12 million, ten-year, fixed rate, non-recourse commercial loan from a conduit.  Because your client is seeking a ten-year commercial loan, the conduit quotes him a negotiated margin over the ***greater*** of ten-year Treasuries (notice the matching term) or ten-year swap spreads. On the date that the attorneys draw the loan documents, ten-year Treasuries are 2.00% and swap spreads are 2.15%.  The conduit will therefore use the greater of the two indexes. Q:  What are some typical margins over swap spreads for multifamily? A:  140-185 bps   [![Don't Be Afraid of First Trust Deeds We've Sold Them For Almost 40 Years](https://no-cache.hubspot.com/cta/default/37671/03fbac0f-e3ed-44d0-a68e-8e8a73b1251d.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/03fbac0f-e3ed-44d0-a68e-8e8a73b1251d)   ![Melted Dog](https://info.c-loans.com/hs-fs/hubfs/Melted%20Dog.jpg?width=466&name=Melted%20Dog.jpg)   [![Commercial Mortgage Brokers You're Doing It All Wrong](https://no-cache.hubspot.com/cta/default/37671/47353a06-ecdf-49ad-a26d-0bd2888fb186.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/47353a06-ecdf-49ad-a26d-0bd2888fb186)   Q:  What are some typical margins for office, retail, and industrial properties? A:  The margins are similar to those of multifamily.  Pricing is most determined by the [debt yield ratio](https://www.c-loans.com/knowledge-base/debt-yield-ratio) or the debt service coverage ratio (DSCR), with the margins on hotel loans being 15-30 bps wider. **Note:** Because I didn't want you to get confused between the speads over the index and swap spreads, I have used the term, ***margin***.  In real life, where the lofty conduit lenders dwell (remember, their minimum loan is $5 million), they use the term, ***spread***, over the index, rather than margin.   [![Become a Hard Money Lender. Approve Your Own Deals!](https://no-cache.hubspot.com/cta/default/37671/247e2ace-c2a5-450b-ae3e-291f280f1d14.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/247e2ace-c2a5-450b-ae3e-291f280f1d14)   [![Get Both Video Training Programs For Just $849.](https://no-cache.hubspot.com/cta/default/37671/d0fb44bc-2893-4551-8a92-6a5080c4296e.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/d0fb44bc-2893-4551-8a92-6a5080c4296e)   ![Popcorn on the Vine](https://info.c-loans.com/hs-fs/hubfs/Popcorn%20on%20the%20Vine.jpg?width=288&name=Popcorn%20on%20the%20Vine.jpg)   [![Need a NMLS License Or Your Renewal Hours?](https://no-cache.hubspot.com/cta/default/37671/9f6491a8-af19-4ba1-9236-8e97c3cd1d16.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/9f6491a8-af19-4ba1-9236-8e97c3cd1d16)   In case you missed my last blog article, we have just fixed a bug that really goofed up [CommercialMortgage.com](http://www.commercialmortgage.com).  You were supposed to see a different list of 30 commercial lenders every time you used our portal, but we screwed up in testing.  The same 30 lenders kept appearing.  *Arghhh*.  Talk about shooting yourself in the foot!! So please come back to [CommercialMortgage.com](http://www.commercialmortgage.com) and see how this wonderful, free commercial mortgage portal was supposed to work.  (Slice-slice-slice.  That's me in a warm bathtub sawing at my wrist.)  I promise you'll be impressed.  We have thousands and thousands commercial lenders from which to choose.   [![Free List of 3,159 Commercial Lenders Sort By Your Own Criteria](https://no-cache.hubspot.com/cta/default/37671/edc33fe8-9d87-477b-bf2f-07a33d3d2d24.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/edc33fe8-9d87-477b-bf2f-07a33d3d2d24)   ![Sweedish movie seats](https://info.c-loans.com/hs-fs/hubfs/Sweedish%20movie%20seats.jpg?width=526&name=Sweedish%20movie%20seats.jpg)   [![Earn 25.4% Annual Yield - Attorney Sponsor in Business For 39 years](https://no-cache.hubspot.com/cta/default/37671/83629e8e-4f46-48e8-9054-cdef870f79a3.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/83629e8e-4f46-48e8-9054-cdef870f79a3)   Curious how we got so many wonderful commercial lenders?  [We traded fee agreements, lender lists, underwriting manuals, and marketing courses for them](https://info.c-loans.com/trade-bankers-for-four-courses).  Ever lusted after my wonderful, nine-hour video training course.  Get a free copy by bringing me [20 bank commercial real estate loan officers](https://info.c-loans.com/free-549-training-course). And guys, these are Honor System trades.  This requirement to be honorable even applies to green-haired lesbians from Lapland.  Nobody gets a pass.  In the sixties, when I grew up, the hippies would all drive these Volkswagen buses, with bumper stickers that said, "Gas, Grass, or (Kisses).  Nobody Rides Free."  *Haha!*   *[![Refer a Comercial Loan Earn a HUGE Referral Fee](https://no-cache.hubspot.com/cta/default/37671/47b7092d-0fe8-43d6-a59b-610884bd1bb0.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/47b7092d-0fe8-43d6-a59b-610884bd1bb0)*   *![Gas-1](https://info.c-loans.com/hs-fs/hubfs/Gas-1.jpg?width=429&name=Gas-1.jpg)*   *[![Subscribe To Blog](https://no-cache.hubspot.com/cta/default/37671/7636800d-cf5e-48c6-88cb-f71c131eb6ee.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/7636800d-cf5e-48c6-88cb-f71c131eb6ee)*   0 Comments [Click here to read/write comments](https://info.c-loans.com/how-conduit-commercial-loans-are-priced#comments-listing) Topics: [Conduit loan pricing](https://info.c-loans.com/topic/conduit-loan-pricing) [All posts](https://info.c-loans.com/all) ### George Blackburne III Owner of C-Loans, Inc. ![George Blackburne III C-Loans Owner](https://info.c-loans.com/hs-fs/hubfs/George%20Head%20Shot%20Small%205%20by%207%20copy.jpg?width=158&name=George%20Head%20Shot%20Small%205%20by%207%20copy.jpg) ### Subscribe via E-mail ### Connect with C-Loans ## [![Get the Latest Scoop on C-Loans Inc.](https://no-cache.hubspot.com/cta/default/37671/bacfb58b-143e-40d7-b126-33c182b5b90b.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/bacfb58b-143e-40d7-b126-33c182b5b90b) C-Loans.com® is sponsored by  C-Loans, Inc. — For more information, contact Tom Blackburne 555 University Ave., Suite 150, Sacramento, CA 95825 Telephone: (916) 338-3232 x 317 * Tom Blackburne in Indiana: (574) 210-6686 * Fax: (916) 338-2328 Real Estate Broker -- California Department of Real Estate -- License Number 01330173 Arizona Dept. of Financial Institutions – License Number 0909472 The Florida Mortgage Brokers License Number: 0708758 [Read our many client Success Stories](https://c-loans.com/mortgage-brokers-overview/success-stories/) » © 2025 C-Loans, Inc. All rights reserved.