Blog

Interest rate risk refers to the potential impact of fluctuating interest rates on investment value, affecting investors, lenders, and borrowers alike. In private real estate credit, lenders mitigate this risk through strategies like selling loans to aggregators for securitization, originating floating rate loans with pricing floors, offering short-term fixed-rate bridge loans, and structuring loan extensions with higher rates and fees. Each approach balances liquidity, predictability, and exposure to rate changes, helping lenders manage duration and return expectations.