Fixed vs. Variable How Much Are Interest Rates Right Now for Long Term Debt?

The Rate Gap Between Fixed and Variable

Now that you know how lender spreads work and how much interest rates are right now on certain loan types, here's the practical question: how much does choosing fixed over variable actually cost you?

For a big business loan, the gap between how much variable interest rates are today and a comparable fixed rate can be significant. And on a large loan over multiple years, that gap can translate into a significant difference in your monthly payment and total interest paid.

The exact numbers will vary widely depending on your lender, loan size, term length, and creditworthiness, but the basic idea holds true: fixed-rate borrowers generally pay more per month than variable-rate borrowers at the outset. Over time, that difference can add up to a big sum, assuming the variable rate stays flat. If variable rates fall, the gap grows further in the variable borrower's favor. If rates rise, the gap narrows or could even flip.

Essentially, fixed-rate borrowers are paying a premium for certainty, while variable-rate borrowers accept rate risk in exchange for a lower upfront cost. How much interest rates are right now matters, sure, but so does where rates are heading over the course of your loan term.

Why Founders May Choose Variable Rates in 2026

The Federal Reserve held its benchmark rate at 3.5% to 3.75% at the March 18 FOMC meeting, but one more cut is predicted this year. Founders who choose variable rates today are betting on that cut: when the prime rate drops, their interest rate may also drop, without having to worry about refinancing. So how much interest rates are right now will just be a stepping stone toward even better rates.

Borrowers who took out SBA loans at the peak (in 2023 and 2024) have already seen this play out. As the Fed has made cuts in the years since, more competitive rates have emerged and their monthly payments have dropped. The variable bet that many founders are willing to take is: rates are more likely to fall than rise from here.

Many SBA 7(a)n loans have variable rates, so that’s the default for many borrowers. Founders who choose fixed rates on these types of loans are bucking the norm… and they need a specific reason to do that.

The Case for Fixed Rates

Regardless of how much interest rates are right now, there are some situations where choosing a fixed interest rate on your business loan may make sense.

When cash flow is tight

If your monthly payment takes up a meaningful portion of your projected cash flow, the unpredictability of a variable rate loan can be a real risk. If your margins are tight, that difference could really matters. In this case, the certainty and predictability of a fixed rate is worth the premium.

When the loan term is long

The longer your loan term, the more rate cycles you'll carry that debt through. A 25-year loan will see many cycles of rising and falling rates, so you’re unlikely to only have rates that stay neutral or drop. In this case, how much interest rates are right now doesn’t matter nearly as much as where they’re headed.

Fixed rates protect borrowers from potential spikes. And when you’re talking about a long loan term, like one that lasts a quarter-century, there will almost certainly be at least one big rate change in the upward direction. Instead, you can choose a fixed-rate mortgage based on how much the interest rate is today, opting to either refinance rates later or ride it out through the course of your loan term.

When you're buying commercial real estate

SBA 504 loans (designed for commercial real estate and major equipment) are designed to have fixed rates by default, which are tied to the 10-year Treasury. When you’re talking about a long-term real estate purchase and its corresponding monthly mortgage payment, a fixed rate is difficult to match. Locking in how much interest rates are right now is status quo for these products.

When you need a known cost

Some deals only work with a specific “cost of capital.” If your underwriting depends on a known monthly payment, taking out a fixed-rate loan (and opting for a locked rate that protects you from the start of your application to closing) eliminates any unknown variable. How much interest rates are today might not be how much they are in a few weeks or months, when your loan closes.

Rate locks typically cover borrowers for 30 to 90 days, though they sometimes come with a small fee. If you’re concerned about rates jumping between the time you apply and when your loan is locked in, regardless of how much interest rates are right now, it’s worth asking your lender about a lock upfront.

What Affects Your Rate

How much interest rates are right now also depends on you, the borrower. Your credit profile is an important part of this equation, as the rates you’re offered might be different from one loan to the next or from another borrower.

Some important factors to consider include your:

• Credit report. Most SBA lenders will require a minimum credit score of 680, but having a 700 or higher may unlock better pricing and loan options, even if interest rates right now are high.

• Loan amount. Larger loans often carry lower spreads, meaning the cost per dollar borrowed can decrease as the loan size increases. For example, the SBA uses a tiered structure where smaller loans may be subject to higher rate caps than larger ones.

• Loan term. Longer terms tend to carry higher fixed rates. Working capital loans generally have repayment terms of 7 to 10 years while real estate allows up to 25 or even 30 years in some cases.

• Collateral and down payment. Better collateral means less risk for your lender, so they may be willing to offer better pricing (especially on bigger loans).

• Debt-to-income ratio (DTI). The stronger your DTI, the more negotiating you can do, no matter how much interest rates are right now.

• Shopping multiple lenders. It doesn’t matter how much you’re borrowing or for what, it’s smart to compare rates and loan options from multiple lenders. Remember, the SBA sets maximum rates, not minimums, and lenders compete for business below those caps.

Also, be sure to always compare the annual percentage rate (APR) between loan options, not just the stated interest rate. That’s because origination fees and closing costs (like discount points) are part of your overall total borrowing cost. Two loans can have the same interest rate but different fees, which could mean very different total costs.

You may also like: Commercial Loans, Get a Small Loan with Low Interest

Final Thoughts

How much are interest rates right now for long-term business debt? Well, in April 2026, they’re lower than they were just a few years ago, and are potentially heading even lower.

Variable rates are a common choice among founders and small business owners. The rate gap between variable and fixed can be significant, and some loan structures include rate caps that offer a degree of protection against sharp increases. That said, fixed rates offer something variable rates don't: a known cost over the life of the loan. For businesses where cash flow predictability and budget certainty matters, that can be worth paying a bit more.

How much are interest rates right now, relative to where they could go? Nobody really knows. But understanding what you're paying for and why puts you in a much stronger position to make that choice wisely.