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NMLS #173855 | Equal Housing Opportunity
Tell us about your deal and we'll text you back with the best rate
NMLS #173855 | Equal Housing Opportunity
Understanding the factors that influence your rate helps you prepare for the best possible terms
Your FICO score is one of the most significant factors in determining your DSCR loan rate. Borrowers with scores of 740 or higher typically qualify for the best rates, often 0.50% to 0.75% lower than those with scores in the 660-680 range. Most DSCR lenders require a minimum score of 620, though some programs accept scores as low as 600 with compensating factors like higher down payments or stronger DSCR ratios. Improving your credit score before applying can translate to significant savings over the life of your loan.
The amount you borrow relative to the property value directly affects your rate. Lower LTV loans (more equity or larger down payments) receive better pricing because they represent less risk to lenders. A loan at 65% LTV will typically have a rate 0.25% to 0.50% lower than a loan at 80% LTV. Most DSCR programs cap LTV at 80%, though some lenders offer up to 85% for well-qualified borrowers. Cash-out refinances often have slightly lower maximum LTVs than purchase transactions.
Different property types carry different risk profiles, which affects pricing. Single-family homes typically receive the best rates, followed by 2-4 unit properties. Condos, townhomes, and larger multifamily properties (5+ units) may see rate adjustments of 0.125% to 0.375%. Short-term rental properties (Airbnb/VRBO) often have additional pricing adjustments due to their income volatility compared to traditional long-term rentals. Rural properties and non-warrantable condos may also carry rate premiums.
The Debt Service Coverage Ratio measures how much rental income covers your mortgage payment. A DSCR of 1.25 (rent is 125% of the payment) is considered strong and will earn better rates. Most lenders prefer a minimum DSCR of 1.0, meaning the rent covers the full payment. Some programs accept DSCR below 1.0 with additional pricing adjustments or compensating factors. Properties with higher DSCR ratios demonstrate stronger cash flow, reducing lender risk and often resulting in rate discounts of 0.125% to 0.25%.
DSCR loans are available in various terms, each with different rate implications. The 30-year fixed is the most popular option, offering payment stability for long-term investors. Adjustable-rate mortgages (ARMs) like the 5/6 or 7/6 ARM typically have lower initial rates, often 0.375% to 0.75% below fixed rates, making them attractive for investors planning to sell or refinance within a few years. Interest-only payment options are also available, which can maximize cash flow but may come with slightly higher rates.
One of the most impactful rate factors is your choice of prepayment penalty. DSCR loans typically offer several options: a 5-year prepay penalty provides the lowest rate (often 0.50% to 0.75% lower than no prepay), while a 3-year prepay offers a middle ground. Choosing no prepayment penalty gives you maximum flexibility but results in the highest rate. For buy-and-hold investors, accepting a longer prepay period can significantly reduce your interest rate and monthly payment. Consider your investment timeline carefully when selecting this option.
Sample rates by credit score and loan-to-value ratio
Important: These rates are for illustration only
Actual rates vary based on multiple factors including your credit score, prepayment penalty selection, property type, loan type (purchase, refinance, or cash-out), and property seasoning. Contact us for a personalized quote based on your specific scenario.
| FICO Score | 65% LTV | 70% LTV | 75% LTV | 80% LTV |
|---|---|---|---|---|
| 740+ | 7.25% - 7.75% | 7.50% - 8.00% | 7.75% - 8.25% | 8.00% - 8.50% |
| 700-739 | 7.50% - 8.00% | 7.75% - 8.25% | 8.00% - 8.50% | 8.25% - 8.75% |
| 680-699 | 7.75% - 8.25% | 8.00% - 8.50% | 8.25% - 8.75% | 8.50% - 9.00% |
| 660-679 | 8.00% - 8.50% | 8.25% - 8.75% | 8.50% - 9.00% | 8.75% - 9.25% |
| 640-659 | 8.25% - 8.75% | 8.50% - 9.00% | 8.75% - 9.25% | 9.00% - 9.50% |
*Rates shown are estimates for 30-year fixed DSCR loans with a 3-year prepayment penalty on single-family properties with DSCR ≥ 1.0. Rates as of March 2026 and subject to change without notice. Actual rates depend on full application review. Not all borrowers will qualify.
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