As of June 1st, 2025, self-employed mortgage rates remain slightly higher than conventional loans, but the gap has narrowed significantly compared to previous years. This shift reflects a more favorable lending environment for entrepreneurs and independent professionals.
With the right preparation and insight into today’s market conditions, self-employed borrowers are well-positioned to secure excellent financing options and take advantage of competitive rates in today’s lending environment.
Current Market Overview: June 2025
According to the latest market data as of June 1st, 2025, conventional mortgage rates are showing these trends:
- 30-Year Fixed Rate: 6.93% (National Average: 6.94%)
- 15-Year Fixed Rate: 6.11%
- FHA 30-Year Fixed: 6.68%
- VA 30-Year Fixed: 6.66%
For self-employed borrowers, rates typically run 0.25% to 0.75% higher than these conventional rates, depending on the loan program and individual qualifications. However, this varies by lender. This means self-employed mortgage rates currently range from approximately 7.18% to 7.68% for 30-year fixed loans.
If you want to know the exact self-employed mortgage rate for your situation, click here to schedule an appointment with one of our loan specialists.
Why Self-Employed Mortgage Rates Can Be Higher
Self-employed mortgage rates carry a slight premium for several reasons:
Risk Assessment: Lenders view self-employment as higher risk due to income variability and lack of traditional employment verification.
Documentation Complexity: Alternative loan programs require additional underwriting time and specialized expertise, which lenders price into their rates.
Loan Type: Non-QM (Non-Qualified Mortgage) loans, which most self-employed borrowers use, typically carry higher rates than conventional conforming loans.
Market Conditions: The specialized nature of self-employed lending means fewer lenders compete in this space, leading to less rate compression.
Self-Employed Mortgage Rate Options
Several loan programs serve self-employed borrowers, each with different rate structures:
Bank Statement Loans
Bank statement loans currently offer some of the most competitive self-employed mortgage rates, typically 0.25% to 0.50% above conventional rates. These loans use bank deposits to verify income rather than tax returns.
P&L (Profit & Loss) Loans
P&L loans often provide competitive rates for established businesses with clean financial statements. Rates typically run 0.375% to 0.625% above conventional mortgages.
DSCR (Debt Service Coverage Ratio) Loans
For real estate investors, DSCR loans focus on property cash flow rather than personal income. Current DSCR rates range from 7.25% to 8.00% for investment properties.
Factors Affecting Your Self-Employed Mortgage Rate
Your specific rate will depend on several key factors:
Credit Score: Higher credit scores can help offset the self-employment premium. Scores above 740 typically qualify for the best available self-employed mortgage rates.
Down Payment: Larger down payments (20% or more) often result in better rates and terms.
Business Stability: Longer business history and consistent income patterns can improve your rate offers.
Cash Reserves: Strong cash reserves demonstrate financial stability and can lead to better pricing.
Property Type: Primary residences typically receive better rates than investment properties or second homes.
Current Market Trends Affecting Self-Employed Borrowers
Several trends are impacting self-employed mortgage rates in 2025:
Rate Stabilization: After significant volatility in recent years, mortgage rates have stabilized, benefiting self-employed borrowers who need time to prepare applications.
Increased Competition: More lenders are entering the non-QM space, creating downward pressure on self-employed mortgage rates.
Regulatory Clarity: Clearer guidelines from regulators have made lenders more comfortable with alternative documentation loans.
Economic Conditions: The Federal Reserve’s current monetary policy has created a more predictable rate environment for all borrowers.
Regional Variations in Self-Employed Mortgage Rates
Self-employed mortgage rates can vary by location due to several factors:
State Regulations: Some states have more favorable lending environments that can result in better rates.
Local Competition: Markets with more alternative lenders may offer more competitive self-employed mortgage rates.
Property Values: High-value markets often have more specialized lenders serving self-employed borrowers.
Economic Conditions: Local economic strength can influence lender appetite and pricing for self-employed loans.
Strategies to Secure Better Self-Employed Mortgage Rates
Several tactics can help you obtain the most competitive rates:
Improve Your Credit Profile: Focus on paying down debts and maintaining excellent payment history before applying.
Organize Financial Documentation: Clean, well-organized financial records can lead to faster approvals and better rates.
Shop Multiple Lenders: Self-employed mortgage rates vary significantly between lenders, making comparison shopping essential.
Consider Different Loan Programs: The best rate might come from a program you hadn’t initially considered.
Time Your Application: Market conditions can change quickly, so monitor rates and apply when conditions are favorable.
The Impact of Down Payment on Self-Employed Mortgage Rates
Down payment size significantly affects self-employed mortgage rates:
10-15% Down: Expect rates at the higher end of the range, with additional mortgage insurance costs. Some lenders offer up to 90% LTV on certain loan types pending additional qualification requirements.
20% Down: Qualifies for better rates and eliminates private mortgage insurance.
25%+ Down: Often results in the most competitive self-employed mortgage rates available.
Comparing Self-Employed Mortgage Rates to Conventional Loans
While self-employed mortgage rates are higher than conventional loans, the gap has narrowed considerably:
Historical Gap: Previously, self-employed borrowers paid 1-2% more than conventional rates.
Current Market: The premium has decreased to 0.25-0.75% in most cases.
Future Outlook: Continued competition and regulatory clarity may further reduce the self-employment rate premium.
Rate Locks and Self-Employed Borrowers
Self-employed applications often take longer to process, making rate locks particularly important:
Extended Lock Periods: Many lenders offer 60-90 day locks for self-employed applications.
Lock Extensions: Understand your lender’s policies for extending locks if underwriting takes longer than expected.
Float-Down Options: Some lenders offer the ability to capture lower rates if they improve during your lock period.
Refinancing Considerations for Self-Employed Borrowers
Current market conditions may present refinancing opportunities:
Rate Improvement: If you obtained financing when self-employed mortgage rates were higher, refinancing might make sense.
Loan Program Switching: You might qualify for a different program type with better rates as your business matures.
Cash-Out Refinancing: Business owners may benefit from accessing equity for business expansion or debt consolidation.
FAQS: Self-Employed Mortgage Rates
Q: How much higher are self-employed mortgage rates compared to conventional loans? A: As of June 2025, self-employed mortgage rates typically run 0.25% to 0.75% higher than conventional rates. This means while conventional 30-year fixed rates average 6.93%, self-employed borrowers can expect rates between 7.18% and 7.68%.
Q: Which loan program offers the lowest self-employed mortgage rates? A: Bank statement loans often provide the most competitive self-employed mortgage rates, typically only 0.25% to 0.50% above conventional rates, especially for borrowers with strong credit and substantial down payments.
Q: Can I get the same rate as a W-2 employee if I’m self-employed? A: While rare, some self-employed borrowers with exceptional credit (750+), large down payments (25%+), and very stable businesses may qualify for rates close to conventional loan pricing.
Q: Do self-employed mortgage rates vary by state? A: Yes, self-employed mortgage rates can vary by location due to state regulations, local competition among lenders, and regional economic conditions. Some states with more favorable lending environments may offer better rates.
Q: How long can I lock my self-employed mortgage rate? A: Most lenders offer 60-90 day rate locks for self-employed applications, with some providing extensions if underwriting takes longer than expected. This is longer than typical 30-45 day locks for conventional loans.
Q: Will my self-employed mortgage rate improve if I refinance later? A: Potentially yes. As your business becomes more established and your financial profile strengthens, you may qualify for better rates through refinancing. Market conditions also change over time.
Q: Do I need a higher down payment to get better self-employed mortgage rates? A: Yes, larger down payments significantly impact self-employed mortgage rates. While 10-15% down is possible, putting down 20% or more typically results in notably better rates and eliminates mortgage insurance.
Q: How do DSCR loan rates compare to other self-employed mortgage rates? A: DSCR loans for investment properties typically have higher rates (7.25% to 8.00%) since they’re based on property cash flow rather than personal income, and investment properties inherently carry more risk than primary residences.
The Bottom Line
Self-employed mortgage rates as of June 1st, 2025, remain competitive despite being slightly higher than conventional loans. With 30-year fixed rates for self-employed borrowers typically ranging from 7.18% to 7.68%, the premium for alternative documentation has decreased significantly compared to historical standards.
The key to securing the best possible self-employed mortgage rate lies in preparation, comparison shopping, and working with lenders who specialize in non-traditional borrowers. Strong credit, substantial down payments, and well-organized financial documentation can help you secure rates closer to the lower end of the range.
At Defy Mortgage, we specialize in helping self-employed professionals secure competitive rates through our various alternative loan programs. Our expertise in bank statement loans, P&L loans, and DSCR financing ensures you’ll receive the best possible terms for your unique situation.
Ready to explore your self-employed mortgage options and secure a competitive rate? Schedule an appointment with our specialized lending team today to discuss how we can help you achieve your homeownership goals with favorable financing terms.
About the Author: Meet Todd Orlando, co-founder and CEO of Defy Mortgage and Defy TPO. With over 20 years of experience in banking and financial services at institutions like First Republic and Morgan Stanley, Todd has dedicated his career to broadening access to lending and revolutionizing the mortgage industry, particularly in the non-QM space.
In 2022, Todd launched Defy Mortgage to provide real estate investors, entrepreneurs, and self-employed individuals with a secure, streamlined, and personalized lending experience tailored to meet their specific needs. He knows firsthand how access to the right mortgage can make or break a project and how today’s borrowers need flexible financial partners and creative lending options designed for their unique needs and lifestyles. Traditional banks are rigid, and their one-size-fits-all approach is outdated. That’s why he created Defy Mortgage — to stay ahead of the curve, set new standards in lending, and deliver personalized, non-traditional solutions for those looking to purchase or refinance.
For the third year running, Todd has been recognized by Inman News for excellence in the mortgage and lending industry, landing on their prestigious Best of Finance list for 2025. He was also honored as a mortgage finance leader in 2023 and 2024 for the same award. His visionary leadership has earned him endorsements from esteemed former colleagues at prestigious institutions across the financial services spectrum.
Beyond his work in finance, Todd is also a co-founder of two software companies in commercial lending and healthcare tech, an active real estate investor, and a husband and father of three. An industry disruptor, Todd is here to redefine what’s possible in mortgage lending.
Mortgage broker itching to elevate client offerings? Check out our TPO business, Defy TPO: https://defytpo.com/
