Updated November 8, 2026. Quick answer: The IRS set the July 2026 applicable federal rates in Rev. Rul. 2026-12: 4.00% short-term, 4.35% mid-term and 4.98% long-term, annual compounding. July 2026 is a past month and this is the rate that ruling published for it; the IRS’s copy of the ruling file is dated June 15, 2026 as the IRS server reports it. The section 7520 rate in the same ruling is 5.2%. As of November 8, 2026 the newest month the IRS has published is November 2026, on the November 2026 AFR rates.
The July 2026 table, in full
Rev. Rul. 2026-12 carries every tier and every compounding column. Table 1, as printed:
| Tier | Rate | Annual | Semiannual | Quarterly | Monthly |
|---|---|---|---|---|---|
| Short-term | AFR | 4.00% | 3.96% | 3.94% | 3.93% |
| Short-term | 110% AFR | 4.41% | 4.36% | 4.34% | 4.32% |
| Short-term | 120% AFR | 4.81% | 4.75% | 4.72% | 4.70% |
| Short-term | 130% AFR | 5.22% | 5.15% | 5.12% | 5.10% |
| Mid-term | AFR | 4.35% | 4.30% | 4.28% | 4.26% |
| Mid-term | 110% AFR | 4.79% | 4.73% | 4.70% | 4.68% |
| Mid-term | 120% AFR | 5.23% | 5.16% | 5.13% | 5.11% |
| Mid-term | 130% AFR | 5.67% | 5.59% | 5.55% | 5.53% |
| Mid-term | 150% AFR | 6.55% | 6.45% | 6.40% | 6.36% |
| Mid-term | 175% AFR | 7.67% | 7.53% | 7.46% | 7.41% |
| Long-term | AFR | 4.98% | 4.92% | 4.89% | 4.87% |
| Long-term | 110% AFR | 5.48% | 5.41% | 5.37% | 5.35% |
| Long-term | 120% AFR | 5.99% | 5.90% | 5.86% | 5.83% |
| Long-term | 130% AFR | 6.50% | 6.40% | 6.35% | 6.32% |
Annual compounding is the column most people mean by the AFR; the semiannual, quarterly and monthly columns are the same rates restated for other compounding periods.
How August 2026 compared
The next month’s ruling, Rev. Rul. 2026-13, set August 2026 as follows (annual compounding), against July 2026:
| Tier | July 2026 | August 2026 | Change in percentage points |
|---|---|---|---|
| Short-term | 4.00% | 4.10% | up 0.10 points (computed: 4.10 minus 4.00) |
| Mid-term | 4.35% | 4.35% | unchanged (computed: 4.35 minus 4.35) |
| Long-term | 4.98% | 4.92% | down 0.06 points (computed: 4.92 minus 4.98) |
The changes are computed here from the two rulings’ Table 1 annual figures. August 2026 in full has the whole August 2026 table.
The section 7520 rate for July 2026
Table 5 of Rev. Rul. 2026-12 states the rate under section 7520 for July 2026 as 5.2%. Section 7520(a)(2) calls for “an interest rate (rounded to the nearest 2/10ths of 1 percent) equal to 120 percent of the Federal midterm rate”. The ruling’s 120% mid-term annual figure is 5.23%, which rounds to the nearest 2/10ths as 5.2% (computed). The IRS’s own table of section 7520 rates lists July 2026 with the same two numbers. It is a separate figure from the three AFR tiers; the month’s own page is the July 2026 section 7520 rate.
Which tier a loan uses
The applicable federal rate comes from section 1274(d) and depends on the term of the debt instrument. Section 1274(d)(1)(A) sets the tier: “Not over 3 years” takes the short-term rate, “Over 3 years but not over 9 years” the mid-term rate and “Over 9 years” the long-term rate. Section 1274(d)(1)(B) has the Secretary determine the rates during each calendar month for the next: each is the “rate which shall apply during the following calendar month”. That is why the July 2026 rates were public before July 2026 began. The loan mechanics, 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 July 2026 rate for a loan made in another month. Each month has its own ruling.
- Reading the section 7520 rate of 5.2% as one of the three AFR tiers. It is a separate figure in the same ruling.
- Taking a semiannual, quarterly or monthly figure for the annual one. The columns restate the same rate for different compounding periods.
Related: June 2026 AFR rates, August 2026 AFR rates, AFR rates by month, the 2026 AFR table, the July 2026 section 7520 rate, and the family loan minimum interest rate.
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Sources
- Internal Revenue Service, Rev. Rul. 2026-12 (prescribed rates for July 2026, Table 1 the applicable federal rates, Table 5 the rate under section 7520): www.irs.gov
- Internal Revenue Service, Rev. Rul. 2026-13 (prescribed rates for August 2026, Table 1 the applicable federal rates, Table 5 the rate under section 7520): www.irs.gov
- 26 U.S.C. 1274, Determination of issue price in the case of certain debt instruments issued for property (U.S. Code, 2024 edition, U.S. Government Publishing Office): www.govinfo.gov
- 26 U.S.C. 7520, Valuation tables (U.S. Code, 2024 edition, U.S. Government Publishing Office): www.govinfo.gov
- Internal Revenue Service, Section 7520 interest rates (monthly table, with the 120% mid-term figure and the rounded rate): www.irs.gov
Read from the primary documents linked above on November 8, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer or the IRS itself is the right place to confirm anything consequential.