The Future of Commercial Real Estate Lending: Trends to Watch
Commercial lending conditions as of October 2026: policy rates in Canada and the U.S., the loan maturity wave, who is lending and what it means for borrowers.
Updated & fact-checked Figures are linked to their sources at the end of the article.
Commercial real estate lending depends on three things that change from quarter to quarter: the level of interest rates, how much existing debt has to be refinanced, and which lenders are willing to lend on which properties. This article summarizes where each stands, with dated sources, for owners and buyers planning a financing in the next year or two.
It is a snapshot. Figures are as of October 12, 2026, and this article is due for review in January 2027. Forecasts are labelled with who made them and when. Nothing here is a prediction of where rates will go.
Interest rates: Canada and the U.S. have diverged
The Bank of Canada cut its policy rate steadily from mid-2024 to late 2025 and has held it at 2.25% since its October 2025 decision. Its most recent decision, on September 2, 2026, left the rate unchanged.[1]
Bank of Canada target for the overnight rate, end of quarter, 2021–2026
Show the data as a table
| Period | Policy rate |
|---|---|
| Q4 21 | 0.25% |
| Q1 22 | 0.50% |
| Q2 22 | 1.50% |
| Q3 22 | 3.25% |
| Q4 22 | 4.25% |
| Q1 23 | 4.50% |
| Q2 23 | 4.75% |
| Q3 23 | 5.00% |
| Q4 23 | 5.00% |
| Q1 24 | 5.00% |
| Q2 24 | 4.75% |
| Q3 24 | 4.25% |
| Q4 24 | 3.25% |
| Q1 25 | 2.75% |
| Q2 25 | 2.75% |
| Q3 25 | 2.50% |
| Q4 25 | 2.25% |
| Q1 26 | 2.25% |
| Q2 26 | 2.25% |
| Q3 26 | 2.25% |
In the U.S., the Federal Reserve moved the other way at its latest meeting. On September 16, 2026, the Federal Open Market Committee raised the target range for the federal funds rate by a quarter point, to 3.75%–4.00%, after cuts in late 2025.[2][3]
For borrowers, the policy rate matters most for floating-rate loans, such as construction and bridge loans priced over prime, CORRA or SOFR. Fixed-rate commercial mortgages are priced mainly off government bond yields, which can move differently. A Canadian owner with a U.S. property, or the reverse, should not assume the two markets will move together.
The maturity wave is past its peak, but large
Loans written years ago keep coming due, and each has to be repaid, extended or refinanced at today’s rates. In February 2026, the Mortgage Bankers Association (MBA) reported that $875 billion, or 17% of the $5.0 trillion of U.S. commercial mortgages outstanding, was scheduled to mature in 2026. That is 9% less than the $957 billion scheduled for 2025, and MBA expects $652 billion in 2027.[4]
Share of U.S. commercial mortgage balances maturing in 2026, by property type
Show the data as a table
| Category | Value |
|---|---|
| Hotel and motel | 30% |
| Industrial | 23% |
| Office | 17% |
| Health care | 15% |
| Multifamily | 13% |
MBA’s chief economist said at the time that the shrinking maturity wall reflected lenders “no longer simply extending loan terms” and forecast stronger origination volume ahead. That forecast was made in February 2026, before the Fed’s September increase.[4] Comparable maturity data are not published for Canada.
Who is lending
In the U.S., total commercial and multifamily mortgage debt reached about $5.1 trillion at the end of the second quarter of 2026, up 0.9% from the first quarter, according to MBA’s quarterly report as summarized by Connect CRE. Commercial banks held the largest share (38%), followed by the agency and GSE portfolios and mortgage-backed securities (22%), life insurance companies (15%) and CMBS and other asset-backed securities (13%).[5]
Two government-linked trends matter for apartment owners:
- In Canada, CMHC is central to rental construction. Its Apartment Construction Loan Program offers up to 100% loan-to-cost on the residential part of qualifying projects, and Budget 2024 earmarked at least $500 million of it for prefabricated or innovative construction and at least $100 million for apartments above existing shops.[6]
- In the U.S., FHA loosened its multifamily underwriting. In January 2025, HUD raised maximum loan-to-value or loan-to-cost on market-rate 221(d)(4) and 223(f) loans from 85% to 87% and lowered the minimum debt coverage from 1.176 to 1.15, with larger changes for affordable projects.[7]
Hotels, shopping centres and transitional properties sit outside these programs and depend on banks, CMBS and private lenders. That is where bridge and private credit continue to fill gaps. See traditional vs. alternative lenders.
What it means for borrowers
Planning a financing in late 2026
Check your maturity date now
If a loan matures in the next 12 to 18 months, size the refinance at today’s rates and income, not the original ones.
Stress-test floating-rate debt
U.S. short-term rates rose in September 2026. Model payments at a higher rate and consider a rate cap or fixing part of the debt.
Use the programs if you qualify
For rental apartments, CMHC and HUD programs offer the highest leverage and longest amortization available.
Start hotel refinancings early
More hotel loans are coming due, and fewer lenders compete for them.
Collect the documents early
A current rent roll or hotel performance report, a trailing 12-month operating statement and an updated appraisal shorten the process.
Our guides to refinancing, bridge loans and economic cycles in commercial lending cover these steps in more depth.
Sources
- Policy interest rate — Bank of Canada. Checked 2026-10-12.
- Federal Reserve issues FOMC statement — Board of Governors of the Federal Reserve System, September 16, 2026. Checked 2026-10-12.
- Open Market Operations: FOMC’s target federal funds rate or range — Board of Governors of the Federal Reserve System. Checked 2026-10-12.
- 17 Percent of Commercial and Multifamily Mortgage Balances to Mature in 2026 — Mortgage Bankers Association, February 9, 2026. Checked 2026-10-12.
- Outstanding U.S. CRE Mortgage Debt Rises to $5.1 Trillion (reporting the MBA Commercial/Multifamily Mortgage Debt Outstanding report for Q2 2026) — Connect CRE, September 29, 2026. Checked 2026-10-12.
- Unlock opportunities with the Apartment Construction Loan Program — Canada Mortgage and Housing Corporation. Checked 2026-10-12.
- Mortgagee Letter 2025-03: Multifamily Changes in Debt Service Coverage Ratios and Loan to Value/Loan to Cost Ratios — U.S. Department of Housing and Urban Development, January 8, 2025. Checked 2026-10-12.
