DSCR Investment Property Loan Rates
How debt-service-coverage-ratio (DSCR) loans qualify on rental income instead of personal income, and why their rates run above conventional investment-property rates.
Conventional benchmark: Freddie Mac weekly survey
Week of August 20, 2026Source: Freddie Mac Primary Mortgage Market Survey via FRED, updated August 20, 2026. National average survey rates, not an offer. Your rate will depend on credit score, loan-to-value, loan type, property and occupancy. Rates could change or not be available at commitment or closing. This product uses the FRED® API but is not endorsed or certified by the Federal Reserve Bank of St. Louis.
How DSCR Investment Property Loan pricing relates to this benchmark. DSCR loans are non-QM investor products priced by individual lenders and investors, not by Fannie Mae or Freddie Mac, and there is no national survey for them. They are typically quoted above the conventional benchmark above, with the spread depending on the property's rent coverage, loan-to-value and prepayment-penalty terms.
How DSCR Investment Property Loan rates are set
A DSCR loan is a non-QM investment-property mortgage that qualifies the borrower on the property's rental income rather than personal income. The debt-service coverage ratio divides gross monthly rent (actual or market rent from the appraisal) by the full monthly payment including taxes, insurance and any association dues. A ratio of 1.0 means the rent exactly covers the payment; most programs prefer 1.0 to 1.25 or higher, though some allow lower ratios at a higher rate.
DSCR rates are generally higher than conventional investment-property rates because the loans are not sold to Fannie Mae or Freddie Mac. They are funded by private capital and securitized in the non-QM market, where investors demand more yield for the reduced income documentation. Pricing is driven by the DSCR itself, credit score, loan-to-value ratio, loan size and whether the loan carries a prepayment penalty.
Prepayment penalties are a defining feature. Many DSCR programs offer a lower rate in exchange for a penalty during the first one to five years, typically structured as a declining percentage of the balance or a set number of months of interest. Florida allows prepayment penalties on these business-purpose loans, but borrowers should read the terms carefully and match the penalty period to their holding plan.
Typical requirements include a credit score in the 660 to 700-plus range, a down payment of 20 to 25 percent, reserves of several months and a property that is or will be rented. Short-term rentals may be eligible at some lenders using projected or documented income. Many investors close in an LLC, which most DSCR lenders permit with a personal guaranty.
Because DSCR loans are business-purpose loans, some consumer protections that apply to owner-occupied mortgages do not apply. That is one reason to work with a licensed originator who explains the full cost, including origination points that are common in this space.
Rates shown could change or may not be available at commitment or closing.
Daily rate-lock index (OBMMI)
Updated daily by providerIndex data © Optimal Blue, LLC. Optimal Blue Mortgage Market Indices.
Source: Optimal Blue Mortgage Market Indices (OBMMI), updated August 26, 2026. National average survey rates, not an offer. Your rate will depend on credit score, loan-to-value, loan type, property and occupancy. Rates could change or not be available at commitment or closing.
DSCR Investment Property Loan Rates: common questions
What DSCR ratio do I need?
Most programs want rent to cover at least 100 to 125 percent of the full payment. Some allow ratios below 1.0 with a larger down payment and a higher rate.
How much higher are DSCR rates than conventional rates?
The gap varies with market conditions and the loan's specifics, but DSCR pricing is generally above conventional investment-property pricing because the loans are privately funded. Quotes are scenario-specific.
Do DSCR loans have prepayment penalties?
Often, yes. Lenders offer a lower rate in exchange for a penalty during the early years. You can usually buy the penalty out with a higher rate.
Can I use short-term rental income for a DSCR loan?
Some lenders accept documented short-term rental history or third-party projections. Rules vary by lender and by local short-term rental regulations.