Bridge loan pricing has barely moved in 2026, because bridge debt takes its cue from the short end of the curve and the Fed has held the federal funds rate at 3.50% to 3.75% since June. What has moved is the exit. The 10-year Treasury closed at 4.69% on July 24, its highest level since January 2025, against an industry forecast that called for it to average 4.2% across the year. Permanent lenders size loans off that curve, so a refinance model built in the spring on consensus rates is now roughly 5% light on proceeds without anything about the property having changed.
What This Article Covers
- Where Rates Stand as of Late July 2026
- Why the Short End and the Long End Have Split
- Where the Consensus Forecast Went Wrong
- What We See in Practice: 50 Basis Points Is 5% of Your Proceeds
- What Should You Underwrite Your Exit At?
- Frequently Asked Questions
Where Rates Stand as of Late July 2026
| Benchmark | Level | Direction |
|---|---|---|
| Fed funds target | 3.50% to 3.75% | Held since June |
| Overnight SOFR | 3.64% (Jul 23) | Flat over 30 days |
| 2-year Treasury | 4.34% | Modestly higher |
| 10-year Treasury | 4.69% (Jul 24) | Up about 27 bps in 30 days |
| 30-year Treasury | 5.16% | Higher |
| 2s10s spread | +34 bps | Upward sloping |
At its June 16 to 17 meeting, the FOMC held the target range unanimously, the first meeting under Chair Kevin Warsh. Two details matter more than the hold. The Committee removed the language from the previous statement that had implied an easing bias, and the Summary of Economic Projections shifted the median 2026 path upward, implying the possibility of one hike before year end rather than a cut.
Sources: FOMC statement, June 17 2026 | FOMC minutes | 10-Year Treasury, FRED | SOFR, New York Fed
Why the Short End and the Long End Have Split
The front end is anchored by policy. The long end is being driven by things policy does not control.
Energy prices above $100 per barrel on Middle East tensions and a new round of tariffs have both pushed input costs and inflation expectations higher. That lifts term premium at the long end. It does not, on its own, hand the Fed a clean reason to move the policy rate, because the same supply shocks that raise prices also weigh on growth.
The result is a curve that has re-steepened after a long flat period. For borrowers, that split has a specific and often missed consequence:
| Bridge loan | Permanent takeout | |
|---|---|---|
| Prices off | Short end, lender cost of capital | 5-year and 10-year Treasury |
| Relevant benchmark now | SOFR 3.64% | 10-year 4.69% |
| Movement in 2026 | Essentially flat | Up materially |
| Underwritten on | Asset, basis, business plan | Stabilized NOI and DSCR |
In 2023 and 2024, with the curve inverted, short money was the expensive money and the standard advice was to keep bridge terms as short as possible. In mid 2026 that has inverted again. The bridge is now the stable input and the takeout is the volatile one.
Where the Consensus Forecast Went Wrong
The Mortgage Bankers Association's 2026 CREF forecast projected the 10-year Treasury averaging 4.2% for the year. That figure, or something close to it, is embedded in a large number of 2026 refinance models, because it is what borrowers and brokers reached for when they needed a forward number in January and February.
The print on July 24 was 4.69%. Roughly 50 basis points above consensus, and trending away from it rather than reverting.
Forecasts miss, and that is not the interesting part. The interesting part is that permanent lenders do not size to your forecast, your business plan, or the rate you were quoted in the spring. They size to a minimum debt service coverage ratio at the rate available on the day you actually refinance. A forecast error does not get discussed at the closing table. It shows up as a smaller loan.
What We See in Practice: 50 Basis Points Is 5% of Your Proceeds
We have originated more than 70 bridge loans and we own and operate in the asset classes we lend on. Since the spring we have been re-quoting exits on live deals at the current curve rather than the curve at term sheet, and the pattern is consistent enough to state as a rule of thumb.
Assumptions: stabilized NOI of $200,000, permanent lender requiring 1.25x coverage, 30-year amortization, no change to NOI or lender spread. Figures rounded and illustrative.
| Exit rate | Supportable permanent loan | Change from baseline |
|---|---|---|
| 6.25% | about $2,166,000 | baseline |
| 6.75% (+50 bps) | about $2,056,000 | about $110,000 less |
| 7.25% (+100 bps) | about $1,954,000 | about $212,000 less |
At these coverage levels and this amortization, every 50 basis points of exit-rate drift costs roughly 5% of your refinance proceeds. That is the number worth carrying around, because it converts an abstract rate move into a payoff gap you can test against your bridge balance in about thirty seconds.
Two things make it worse in practice. Permanent lender spreads can widen on top of the index move, so the all-in exit rate frequently travels further than the Treasury alone. And this compounds with the income-side sizing gaps that already catch borrowers: revenue the takeout lender will not count, the commercial DSCR formula rather than the residential one, and imputed expenses above your actual operating statement. A stale rate assumption sitting on top of an optimistic income assumption is how a manageable gap becomes a workout.
What Should You Underwrite Your Exit At?
Not the forecast, and not the rate you were quoted when you signed the bridge.
- Start from today's 10-year, not a full-year average projection. Averages smooth over exactly the movement that hurts you.
- Add your takeout lender's current spread, quoted this month for your execution type. Bank, agency, and CMBS spreads differ and move independently.
- Add a cushion. We have moved from 25 basis points to 75. Twenty-five was adequate when the curve was range-bound. The 10-year moved 27 basis points in the last month alone.
- Test the resulting proceeds against your bridge payoff plus closing costs. If it does not clear, you have found the problem in month two instead of month eleven.
- Buy time rather than basis points. An extension option negotiated at origination is cheap. The same conversation at maturity is expensive and sometimes unavailable.
Two caveats worth stating plainly. Long rates could fall as easily as rise, and a borrower who locks a conservative structure gives up some upside if they do. And a stressed exit assumption will kill some deals that would have been fine. We accept that trade because the outcomes are not symmetric: a deal that pencils 5% better than expected is a good year, while a deal that cannot refinance at maturity is a workout.
For the full exit-first underwriting framework, see when to use a bridge loan. For what a permanent lender will ask for, see our commercial bridge loan requirements checklist.
Frequently Asked Questions
Are bridge loan rates going up in 2026?
Bridge rates have been stable. They price off short-term benchmarks, and the Fed has held the federal funds rate at 3.50% to 3.75% since June, with SOFR at 3.64% on July 23. The 2026 move has been at the long end of the curve, which affects your exit rather than your bridge.
How does the 10-year Treasury affect my bridge loan?
It does not affect the bridge directly. It affects the refinance you plan to use to repay it. Permanent financing, including bank, agency, and DSCR execution, prices off the long end, so a rising 10-year raises your exit rate and shrinks the loan a lender will size to your NOI.
What exit rate should I underwrite in 2026?
Today's 10-year plus your takeout lender's current spread plus a cushion. We are using 75 basis points rather than the 25 that was adequate when the curve was range-bound. Do not model off a full-year average forecast, because consensus for 2026 is currently running about 50 basis points below where the 10-year is actually trading.
Will the Fed cut rates in 2026?
The June statement dropped the language implying an easing bias, and the median projection shifted toward the possibility of one hike before year end rather than a cut. Markets have been pricing a hold at recent meetings, with rising odds of a hike later in the year as energy prices climbed. Treat a cut as upside to benefit from, not an assumption to underwrite against.
Should I take a fixed or floating rate bridge loan right now?
A fixed-rate bridge removes index risk for the term, which matters more than it did a year ago now that Fed projections point toward a possible hike rather than a cut. Floating is cheaper today. The right answer depends on your expected hold period and whether your deal absorbs a payment increase without breaking coverage.
Get a Quote With the Exit Priced In
If you have a deal under contract, the useful conversation is what your takeout sizes to at today's curve, not what the bridge coupon is. Send us the deal and we will underwrite the exit alongside the bridge, including when the answer is that the numbers do not work. For programs by asset type, see our commercial bridge loan page.
Call 813.502.0197.
About the Author
Dylan Marma, CCIM is CEO of Requity Group with hands-on experience across 32+ property acquisitions, 70+ bridge loans originated, and $150M+ in assets under management.
Rate data current as of July 27 2026. This article is refreshed after each FOMC meeting.