Mortgage rates on investment property are almost always higher than rates on primary residences.
That’s not arbitrary. It’s risk-based pricing.
Investment properties carry:
- Higher default risk
- Greater market sensitivity
- More speculative intent
- Lower borrower occupancy stability
So, how much higher are investment property mortgage rates?
In 2026, Investment property mortgage rates are typically 0.50%–1.50% higher than primary residence rates.
But the real answer depends on:
- Loan type (conventional vs DSCR)
- Loan-to-value (LTV)
- Credit score
- Property type
- Prepayment structure
- Market cycle
This guide breaks it down using federal data, investor lending trends, and lender comparisons.
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Current Investment Property Mortgage Rate Ranges (2026)
While exact rates change daily, here’s the general structure:
| Loan Type | Typical Rate Relationship |
| Primary Residence | Baseline market rate |
| Conventional Investment | +0.50% to +0.875% |
| DSCR Loan | +0.75% to +1.50% |
| Short-Term Rental DSCR | Often higher due to volatility |
| Interest-Only Investment | Slight premium over amortizing |
Primary residence rates are commonly tracked by Freddie Mac’s Primary Mortgage Market Survey (PMMS).
Investment property loans apply additional pricing adjustments.
Why Are Mortgage Rates Higher on Investment Property?
Under Fannie Mae guidelines, lenders apply Loan-Level Price Adjustments (LLPAs) to investment properties.
Investment properties receive LLPAs because:
- Borrowers are less likely to prioritize payment in distress
- Rental income may fluctuate
- Vacancy risk exists
- Market corrections affect investors first
DSCR loans are priced differently because:
- They are non-QM
- They do not rely on DTI
- They are often portfolio or securitized products
- They include prepayment structures
Higher flexibility = pricing premium.
Conventional Investment Property Rates
Conventional loans for rental properties typically require:
- 15–25% down payment
- Strong personal income
- DTI calculation
- Property count limits (often 10 financed properties max)
Rates are usually: 0.50%–0.875% above primary residence rates. Lower LTV and credit scores of 740+ significantly improve pricing.
Conventional is often best for:
- Investors with high W2 income
- 1–4 financed properties
- Lower leverage preference
But conventional scalability is limited.
DSCR Loan Rates (2026 Breakdown)
DSCR loans qualify based on rental income — not personal income.
That flexibility affects pricing.
DSCR loan rates typically:
- Sit 0.75%–1.50% above conventional investment rates
- Improve with 25%+ down payment
- Improve with 720+ credit
- Improve with stronger DSCR ratios (1.2+)
But here’s what matters:
DSCR allows:
- Unlimited DTI freedom
- LLC borrowing
- Portfolio scaling
- No personal income documentation
For many investors, flexibility outweighs rate premium.
👉 See how DSCR qualification works
2026 Investment Property Rate Influencers
Rates depend on more than market averages.
Key factors:
1. Loan-to-Value (LTV)
Higher LTV = higher risk = higher rate.
- 75% LTV → stronger pricing
- 80% LTV → moderate pricing
- 85% LTV → pricing premium
2. Credit Score
Typical tiers:
- 620–659 → highest rates
- 660–699 → improved pricing
- 700–739 → strong tier
- 740+ → best available pricing
3. Prepayment Penalty Structure
Many DSCR loans include:
- 3-year
- 5-year
- Step-down prepayment penalties
Longer prepay terms often improve rate pricing.
4. Property Type
- Single-family rental → strongest pricing
- 2–4 unit → slightly higher
- Short-term rental → variable
- Rural / non-warrantable → higher risk tier
Best Lenders for Investment Property Rates (2026 Comparison)
This is not a marketing ranking. This is structural positioning.
| Lender | Conventional | DSCR | Max LTV | Best For |
| Rocket Mortgage | Yes | No | 85% agency | W2 investors |
| Angel Oak | Limited | Yes | 80–85% | Non-QM depth |
| A&D Mortgage | Limited | Yes | 80–85% | Broad DSCR |
| CoreVest | No | Yes | 75–80% | Large portfolios |
| Lima One | No | Yes | 75–80% | BRRRR |
| Griffin Funding | Limited | Yes | ~80% | Retail DSCR |
| Truss Financial | Limited | Yes | ~80% | Rental investors |
| Defy Mortgage | No | Yes | Up to 85% | Scaling investors |
When Rate Should NOT Be Your Only Metric
Most investors focus on the rate. But structure determines scalability.
Example:
- Slightly higher DSCR rate
- No DTI cap
- 85% LTV
- Interest-only
- LLC ownership
That structure may outperform a lower conventional rate with scaling limits.
👉 If you’re scaling rentals and want to compare structure vs rate impact, schedule a strategy session
Interest-Only Investment Property Rates
Interest-only loans typically price:
- Slightly higher than fully amortizing
- Lower than bridge loans
- Competitive within the DSCR framework
IO improves:
- Cash flow
- Liquidity
- Scaling velocity
For portfolio builders, cash flow often matters more than marginal rate differences.
Strategic Investor Takeaway: Investment Property Interest Rates
Mortgage rates on investment property matter.
But so does:
- Leverage
- Flexibility
- Portfolio scaling
- Prepayment structure
- Liquidity retention
In 2026, the smartest investors compare structure first — rate second.
If you:
- Operate through LLCs
- Want 85% LTV
- Prefer interest-only
- Are scaling beyond conventional limits
👉 Explore investor-focused DSCR options
- Built for investors.
- Structured for growth.
Underwritten around cash flow — not W2s.
Defy the traditional.
FAQ: Investment Property Mortgage Rates
Are mortgage rates higher for investment property?
Yes. Typically, 0.50%–1.50% higher than primary residence rates.
What is the lowest down payment for investment property?
Conventional loans may allow 15% down. DSCR typically starts around 15–20%.
Do DSCR loans have higher rates?
Yes, generally higher than conventional investment loan rates due to the flexibility.
Can you get 85% LTV on investment property?
Yes, select lenders offer DSCR up to 85% LTV for qualified borrowers.
Are investment property rates tax-deductible?
Mortgage interest may be deductible on rental properties. Consult a tax professional.
