Rate tables date within weeks. The spread and the levers do not — here is how DSCR pricing is actually built, and how to tell a real quote from a headline.
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DSCR loan rates typically run 1 to 2 percentage points above conventional investment-property pricing, with origination of 1 to 2 points on top. The spread exists because the lender is taking no income documentation and no debt-to-income test — the property carries the whole file. Your specific rate is set by five inputs: the ratio itself, loan-to-value, credit score, property and rental type, and which prepayment structure you accept.
Published rate tables age badly and this page deliberately does not print one. What follows is how the pricing is actually built, so you can tell a good quote from a bad one.
Want a real number rather than a range? Send us the property and we will bring back live quotes.
Because the ratio prices the loan rather than merely qualifying it, improving it pays twice — once in approval odds and again every month for the life of the loan.
Take a $262,500 loan. Suppose moving from a 1.05x file to a 1.25x file improves your rate by half a point. On a 30-year amortisation that is roughly $90 a month, about $1,080 a year, and more than $10,000 across a ten-year hold — before considering that the stronger file also opens more lenders.
The usual route to a better tier is more equity. On a $350,000 purchase at 7.25%, moving from 25% to 30% down lifts a 0.99x file to about 1.06x. Another five points can carry it past 1.15x. Model both in the calculator before deciding how much cash to leave in the deal.
Not sure which tier your file lands in? Submit the deal and we will price it at several leverage points.
Most DSCR lenders will move rate for points and points for rate. Which is right depends entirely on how long you will hold the loan, and that is a question about your strategy, not about the loan.
A rough test: divide the cost of the points by the monthly saving to get a break-even in months. If you expect to sell or refinance before that point, do not buy the rate down. Investors intending to hold a decade should usually buy down; anyone planning a refinance once rates move should usually not.
The same arithmetic applies to prepayment buy-downs, and it is the calculation most borrowers skip.
Structures such as 5-4-3-2-1 and 3-2-1 apply a declining percentage of the balance if you repay early. They are not incidental — they are priced, and the lender will trade them against rate.
On a $262,500 loan, a 5% first-year penalty is over $13,000. If your plan is to refinance within eighteen months, that figure dwarfs any rate difference you were negotiating. Decide the exit first, then choose the structure, then compare rates within that structure — comparing across structures is comparing different products.
Planning to refinance or sell soon? Tell us the timeline and we will only quote structures that fit it.
A conventional investment-property mortgage is cheaper because it is underwritten on a verified borrower and, in many cases, sold into an agency execution. A DSCR loan is underwritten on the asset and sold into private credit markets, which price the absence of income verification.
That premium buys four things: no tax returns, LLC titling without due-on-sale friction, no cap on financed properties, and a faster close. If none of those matter to you — clean W-2 income, room in your DTI, under ten financed properties, buying in your own name — you are paying for optionality you will not use. Take the conventional loan. See DSCR versus conventional for the full comparison.
We normalise quotes to the same structure and leverage so the comparison is real. Get matched.
What are DSCR loan rates right now?
DSCR loan rates typically run 1 to 2 percentage points above conventional investment-property pricing, with 1 to 2 points of origination. Rather than a published table that dates quickly, the useful figure is the spread: pricing moves with the underlying index, so ask for a live quote and compare the spread rather than an absolute number.
Why are DSCR loan rates higher than conventional?
Because the lender takes no income documentation and no debt-to-income test, and the loan is sold into private credit markets rather than an agency execution. The premium buys no tax returns, LLC titling without due-on-sale friction, no cap on financed properties, and a faster close. If you do not need those, conventional is cheaper.
Does a higher DSCR get you a better rate?
Yes. The ratio prices the loan, not just qualifies it. Files at 1.25x and above get the best pricing, 1.10 to 1.24x carries a modest add-on, 1.00 to 1.09x costs meaningfully more, and below 1.00 is no-ratio pricing. Improving the ratio pays in approval odds and again every month.
Should you buy down a DSCR loan rate with points?
It depends on your hold period. Divide the cost of the points by the monthly saving to get a break-even in months. If you expect to sell or refinance before that point, do not buy down. Long-term holders usually should; anyone planning to refinance when rates move usually should not.
How much does the prepayment penalty affect the rate?
Materially. Accepting a five-year declining penalty buys a lower rate than a three-year, and buying it out entirely costs the most. On a $262,500 loan a 5% first-year penalty is over $13,000, which dwarfs the rate differences borrowers usually negotiate. Decide the exit first, then compare rates within one structure.
Send the address, the rent and the purchase price. We will bring back quotes at the same leverage and prepayment structure so the comparison actually means something.