Updated October 1, 2026. Quick answer: The 2025 short-term applicable federal rate ran from 3.66% in December to 4.34% in February, annual compounding. Every month’s short, mid and long-term rate is below, each from the revenue ruling that set it. This is the table to check for a loan or sale dated in 2025.
The next year of rates, before the IRS publishes them: the 2027 AFR rates as the IRS publishes them.
Every 2025 month
| Month | Ruling | Short-term AFR | Mid-term AFR | Long-term AFR | 120% mid-term AFR |
|---|---|---|---|---|---|
| January | 2025-1 | 4.33% | 4.24% | 4.53% | 5.10% |
| February | 2025-5 | 4.34% | 4.52% | 4.86% | 5.43% |
| March | 2025-6 | 4.31% | 4.46% | 4.82% | 5.36% |
| April | 2025-8 | 4.16% | 4.21% | 4.61% | 5.06% |
| May | 2025-10 | 4.05% | 4.10% | 4.62% | 4.93% |
| June | 2025-12 | 4.00% | 4.07% | 4.77% | 4.90% |
| July | 2025-13 | 4.12% | 4.19% | 4.90% | 5.04% |
| August | 2025-14 | 4.03% | 4.06% | 4.82% | 4.88% |
| September | 2025-17 | 4.00% | 4.04% | 4.83% | 4.86% |
| October | 2025-19 | 3.81% | 3.87% | 4.73% | 4.65% |
| November | 2025-21 | 3.69% | 3.83% | 4.62% | 4.60% |
| December | 2025-24 | 3.66% | 3.79% | 4.55% | 4.55% |
Each row above comes from the ruling whose own heading names that month, and the ruling number matches the IRS section 7520 prior-years table.
Which tier a loan uses
The applicable federal rate comes from section 1274(d) and depends on the term of the debt instrument. Under section 1274(d)(1)(A) the rate follows the term: “Not over 3 years” takes the Federal short-term rate, “Over 3 years but not over 9 years” the mid-term rate and “Over 9 years” the long-term rate. Under section 1274(d)(1)(B) the IRS determines each month’s rates during the month before.
The lowest of three months for a sale
For a sale or exchange the statute allows a look-back: “the applicable Federal rate shall be the lowest 3-month rate”, meaning “the lowest of the applicable Federal rates in effect for any month in the 3-calendar-month period ending with the 1st calendar month in which there is a binding contract in writing for such sale or exchange”. For a binding contract in March 2025, the window is January, February and March 2025, and the lowest short-term rate among them is 4.31% (read from the table above).
How 2025 compares with 2026
The 2026 months, with the same columns, are on the 2026 AFR table. The family loan rules, including the dollar exceptions, are on the family loan minimum interest rate page, and the calculator turns a rate into dollars.
Common mistakes
- Using the annual column when a document calls for semiannual compounding. Each ruling prints all four columns.
- Taking a rate from a ruling without checking that its own heading names the month you need.
- Forgetting the three-month look-back for a sale or exchange.
Related: the 2026 AFR table, AFR rates by month, and the family loan minimum interest rate.
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. 2025-1, Table 1 and Table 5 (January 2025): https://www.irs.gov/pub/irs-drop/rr-25-01.pdf
- Rev. Rul. 2025-5, Table 1 and Table 5 (February 2025): https://www.irs.gov/pub/irs-drop/rr-25-05.pdf
- Rev. Rul. 2025-6, Table 1 and Table 5 (March 2025): https://www.irs.gov/pub/irs-drop/rr-25-06.pdf
- Rev. Rul. 2025-8, Table 1 and Table 5 (April 2025): https://www.irs.gov/pub/irs-drop/rr-25-08.pdf
- Rev. Rul. 2025-10, Table 1 and Table 5 (May 2025): https://www.irs.gov/pub/irs-drop/rr-25-10.pdf
- Rev. Rul. 2025-12, Table 1 and Table 5 (June 2025): https://www.irs.gov/pub/irs-drop/rr-25-12.pdf
- Rev. Rul. 2025-13, Table 1 and Table 5 (July 2025): https://www.irs.gov/pub/irs-drop/rr-25-13.pdf
- Rev. Rul. 2025-14, Table 1 and Table 5 (August 2025): https://www.irs.gov/pub/irs-drop/rr-25-14.pdf
- Rev. Rul. 2025-17, Table 1 and Table 5 (September 2025): https://www.irs.gov/pub/irs-drop/rr-25-17.pdf
- Rev. Rul. 2025-19, Table 1 and Table 5 (October 2025): https://www.irs.gov/pub/irs-drop/rr-25-19.pdf
- Rev. Rul. 2025-21, Table 1 and Table 5 (November 2025): https://www.irs.gov/pub/irs-drop/rr-25-21.pdf
- Rev. Rul. 2025-24, Table 1 and Table 5 (December 2025): https://www.irs.gov/pub/irs-drop/rr-25-24.pdf
- IRS, Section 7520 interest rates for prior years: https://www.irs.gov/businesses/small-businesses-self-employed/section-7520-interest-rates-for-prior-years
- 26 U.S.C. 1274, determination of issue price in the case of certain debt instruments (GovInfo): https://www.govinfo.gov/link/uscode/26/1274
Sources: the primary documents linked above, read on October 1, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the plan administrator or the agency itself is the right place to confirm anything consequential.