Updated September 28, 2026. Quick answer: the September 2026 applicable federal rate is 4.18% short-term, 4.49% mid-term and 5.12% long-term, annual compounding, from Rev. Rul. 2026-17. September 2026 is the current month as this page was last updated. Every 2026 month is gathered here and the full-year table with the 120% mid-term rate is here.
Two months on, before the IRS publishes it: the November 2026 AFR rates when the IRS publishes them.
The month before October, in full: the August 2026 AFR rates.
Related guides on this topic: Lending Money to Family and The $100,000 Family Loan Rule Is a Cap, Not an Exemption.
The full September 2026 table
Table 1 of Rev. Rul. 2026-17, every tier and every compounding column, exactly as printed. Section 7872(f)(2) names the semiannual column for a family loan; annual is the column most people mean by “the AFR.”
| Rate | Annual | Semiannual | Quarterly | Monthly |
|---|---|---|---|---|
| Short-term | ||||
| AFR | 4.18% | 4.14% | 4.12% | 4.10% |
| 110% AFR | 4.60% | 4.55% | 4.52% | 4.51% |
| 120% AFR | 5.03% | 4.97% | 4.94% | 4.92% |
| 130% AFR | 5.45% | 5.38% | 5.34% | 5.32% |
| Mid-term | ||||
| AFR | 4.49% | 4.44% | 4.42% | 4.40% |
| 110% AFR | 4.94% | 4.88% | 4.85% | 4.83% |
| 120% AFR | 5.40% | 5.33% | 5.29% | 5.27% |
| 130% AFR | 5.85% | 5.77% | 5.73% | 5.70% |
| 150% AFR | 6.77% | 6.66% | 6.61% | 6.57% |
| 175% AFR | 7.92% | 7.77% | 7.70% | 7.65% |
| Long-term | ||||
| AFR | 5.12% | 5.06% | 5.03% | 5.01% |
| 110% AFR | 5.65% | 5.57% | 5.53% | 5.51% |
| 120% AFR | 6.16% | 6.07% | 6.02% | 5.99% |
| 130% AFR | 6.69% | 6.58% | 6.53% | 6.49% |
Which of the three tiers applies, and what the rate is used for
Section 1274(d)(1)(A) sets the tier by term: not over 3 years takes the short-term rate, over 3 but not over 9 the mid-term rate, over 9 the long-term rate. Charge at least the rate for the right tier on a loan between family and section 7872 does not treat it as below-market, so nothing is imputed and there is no gift to consider. A demand loan always uses the short-term rate under section 7872(f)(2)(B), redetermined every year, at the semiannual figure above. The full mechanics, including the $10,000 and $100,000 exceptions, are here.
A separate figure in the same ruling, the section 7520 rate, values an annuity, a life estate, a remainder or a reversionary interest, for example inside a GRAT or a charitable remainder trust; it is not one of the three AFR tiers above. For September 2026 it is 5.40%.
The term you choose is the term the document has to state
Which of the three rates applies depends on the maturity, and a demand loan is re-tested every year while a fixed term is settled on the day you sign. That choice only exists on paper: the document is what fixes the term, the rate and the repayment schedule that the section 1274(d) tiers are read against. LawDepot builds a state-specific loan agreement.
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Sources
- Rev. Rul. 2026-17, Table 1 and Table 5 (September 2026 applicable federal rates): https://www.irs.gov/pub/irs-drop/rr-26-17.pdf
- 26 U.S.C. § 1274: uscode.house.gov
- 26 U.S.C. § 7872: uscode.house.gov
- 26 U.S.C. § 7520: uscode.house.gov
- IRS, Applicable Federal Rates index: https://www.irs.gov/applicable-federal-rates
Related: How the minimum interest rule works · Every 2026 month, one table · The full-year table with the 120% mid-term rate · October 2026 AFR rates · The calculator turns the rate into dollars.
Figures verified against Rev. Rul. 2026-17 on the IRS website on September 29, 2026.
General information drawn from the Internal Revenue Code and the IRS revenue ruling named above, not legal, tax or financial advice. Applicable federal rates change every month, so this rate applies to the month named above only. We are not a law firm or a tax adviser.