Short answer
Credit spread reflects the lender's required risk premium plus a target margin. It is calibrated against deal LTV, debt yield , asset class, sponsor strength, market, and the lender's competition. The same loan can quote 25 to 50 basis points apart between two qualified lenders depending on capital availability and pipeline.
What inputs move it most?
LTV and debt yield are the largest factors, every 5 percent of leverage typically moves 10 to 20 basis points. Asset class drives 25 to 75 basis points (multifamily and industrial tightest, hotel and office widest). Sponsor strength and market liquidity each move 10 to 25 basis points. Competition is the wildcard that moves 25 to 50 basis points.
Sources
- Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations · Mortgage Bankers Association · 2026-Q1