Non-QM Mortgage Rates in 2026
Updated: March 2026
What Is a Non-QM Mortgage?
A Non-QM (Non-Qualified Mortgage) is a home loan that allows borrowers to qualify using alternative documentation — such as bank statements, rental income, or liquid assets — instead of traditional W-2 income and tax returns. Non-QM loans fall outside the standard guidelines set by Fannie Mae and Freddie Mac, giving lenders the flexibility to evaluate borrowers based on their full financial picture.
Non-QM rates don’t work like conventional rates. There’s no daily posted number you can look up on a government site. Your rate depends on the loan type, your LTV, your credit profile, and the property itself.
What you’ll find below are rate indications from Defy Mortgage for typical borrower scenarios — so you can compare honestly before you apply. Because Defy originates and funds its own loans, borrowers avoid the extra layers of pricing that often exist in broker or correspondent channels.
Current Non-QM Rates by Loan Type
Example rate ranges shown for a 740 FICO borrower at standard LTV. Actual rates vary based on borrower profile, points, reserves, property type, and market conditions. These reflect current rate indications from Defy Mortgage for typical borrower scenarios.
| Loan Type | Purchase Rate | Refi Rate | Standard LTV | Notes |
|---|---|---|---|---|
| DSCR Loan | 6.000% | 6.125% | 75% | Qualifies on property cash flow, min 0.75 DSCR |
| Bank Statement (Personal or Business) | 6.250% | 6.250% | 75% | 12–24 months statements |
| P&L Loan | 6.500% | 6.625% | 75% | CPA-prepared P&L accepted |
| Asset Depletion | 6.250% | 6.250% | 75% | Qualify on liquid assets, no income docs required |
| Foreign National DSCR | 6.750% | 6.750% | 70% | No US FICO required |
Interest-only option: Available on all products above. Add approximately 0.25% to the applicable rate.
Example rates shown are not a commitment to lend and do not include discount points, fees, or APR.
Non-QM Rates vs. Conventional Mortgage Rates
Many borrowers researching Non-QM loans want to understand how they compare to conventional mortgage rates.
The short answer: Non-QM rates are usually slightly higher than conventional rates, but the difference has narrowed significantly in recent years — especially for DSCR and bank statement loans.
The reason is straightforward. Conventional loans follow strict agency guidelines set by Fannie Mae and Freddie Mac. When a borrower falls outside those rules, lenders must use private capital to fund the loan. Private capital requires a small premium to offset the additional underwriting flexibility. What borrowers gain in return is the ability to qualify using alternative documentation instead of traditional W-2 income and tax returns.
Conventional investor mortgage rates typically run 0.5%–1% above primary residence rates — putting them in the 6.000%–6.500% range today — making DSCR pricing at 6.000% surprisingly competitive for investors who qualify.
| Loan Type | Typical Rate Range | Key Qualification Method |
|---|---|---|
| Conventional Primary Residence | Lower range | W-2 income, tax returns, DTI |
| Conventional Investment Property | Slightly higher than primary | W-2 income + DTI |
| DSCR Investor Loan | Competitive with conventional investor in many scenarios | Property cash flow |
| Bank Statement Loan | Modest premium over conventional | 12–24 months deposits |
| Asset Depletion Loan | Modest premium over conventional | Liquid assets |
Example ranges shown for educational purposes only. Actual rates vary by borrower profile, market conditions, and loan structure.
Why many borrowers choose Non-QM anyway
For the borrowers Defy Mortgage works with, the decision usually isn’t about chasing the absolute lowest rate — it’s about qualifying correctly. Many entrepreneurs, investors, and self-employed professionals have strong financial profiles but don’t fit conventional documentation requirements.
Non-QM programs allow lenders to evaluate the full financial picture, including business cash flow, rental income, liquid assets, and bank statement deposits. For borrowers whose income structure falls outside traditional guidelines, that flexibility often matters far more than a small rate difference.
DSCR Loan Rates in 2026
As of March 2026, DSCR loan rates for residential investment properties generally range between 5.999% and 7.625%, representing a significant drop from 2024 levels. Keep in mind that DSCR rates vary based on credit score, LTV, and cash flow, with prime borrowers accessing the best terms for DSCR loans.
What Are DSCR Loan Rates Right Now?
DSCR loan rates vary based on credit score, loan-to-value (LTV), property type, and the property’s debt service coverage ratio. For well-qualified investors with a 740 credit score and 75% LTV, DSCR mortgage rates are currently pricing in the mid-6% range depending on the lender and loan structure.
Unlike conventional investment property loans, DSCR loans qualify borrowers based on the property’s cash flow instead of personal income. That means investors can often qualify without tax returns, W-2s, or personal debt-to-income calculations.
Because underwriting focuses on the property’s rental income and DSCR ratio, these loans are widely used by real estate investors building rental portfolios or scaling multiple properties. Most DSCR loans are structured as 30-year fixed mortgages with optional interest-only periods for investors prioritizing cash flow.
Typical DSCR Loan Rate Factors
- Credit score
- Loan-to-value ratio (LTV)
- DSCR ratio
- Property type
- Interest-only vs. fully amortizing
DSCR loans are Defy’s most popular product for real estate investors. At 75% LTV with a 740 FICO and a DSCR of 1.0 or better, current rate indications are around 6.000% on purchase for this scenario. That reflects Defy’s position as a direct lender that originates and funds its own loans.
What Moves DSCR Rates Specifically
- LTV tier: 75% is the benchmark rate. At 80%, expect a modest premium. At 85% LTV — available on SFR purchases with 740+ FICO and DSCR ≥ 1.0 — the premium is more meaningful, but the leverage benefit frequently outweighs it for investors deploying capital across multiple properties.
- DSCR ratio: Defy Mortgage lends down to 0.75 DSCR. Sub-1.0 DSCR loans carry a rate premium. The specific adjustment depends on the ratio, reserves, and property type.
- Interest-only: Adding an interest-only structure costs approximately 0.25%. For cash-flow-focused investors, the lower monthly payment frequently justifies the rate difference.
- Property type: SFR prices best. Multi-family, condotels, and short-term rental properties can carry a modest premium depending on the market.
Bank Statement Mortgage Rates
Bank statement loans allow self-employed borrowers and business owners to qualify using 12–24 months of personal or business bank deposits rather than tax returns.
Defy prices personal and business bank statement loans identically: 6.250% on purchase and 6.250% on refi at 75% LTV for a 740 FICO borrower. The rate reflects the straightforward nature of bank statement income calculation — consistent deposits tell a clean story.
Key rate factors: deposit consistency, business type, LTV, and whether the borrower is using personal or business statements. Strong, consistent deposits with clean account history qualify best.
Asset Depletion Mortgage Rates
Asset depletion loans allow borrowers to qualify entirely on liquid assets — no income documentation required. Lenders calculate a monthly income equivalent by dividing eligible assets over a standard loan term.
Defy prices asset depletion loans at 6.250% on both purchase and refi at 75% LTV for a 740 FICO borrower — matching bank statement pricing. This product is particularly well-suited for retirees, high-net-worth borrowers, and investors with significant liquid holdings but limited traditional income documentation.
What Moves Your Non-QM Rate
Every borrower is different, and Non-QM pricing reflects that. These are the five factors that matter most:
1. Credit Score
A 740 FICO unlocks Defy’s best pricing. Rates step up incrementally below 720, and again below 680. A stronger score pays for itself over the life of the loan.
2. LTV / Down Payment
The rates above are based on 75% LTV. Moving to 80% adds roughly 0.125%–0.25% depending on the product. Moving to 85% LTV — available on DSCR purchases — adds more. Higher leverage costs more. It’s the right tradeoff for many investors. Just factor it in.
3. Loan Type
DSCR pricing is tightest because the underwrite is clean — one ratio, one property. Bank statement and P&L add income calculation complexity. Asset depletion is straightforward but product-specific. Foreign National carries an additional risk premium.
4. DSCR Ratio (for investor loans)
On DSCR loans, your debt service coverage ratio directly affects your rate. A DSCR of 1.25+ is clean. Below 1.0 — which Defy allows down to 0.75 — will price higher. The property still qualifies; it just costs more to hold.
5. Reserve Months
Most Non-QM programs require a minimum of 3–6 months of reserves after closing, with 12 months required for lower DSCR or higher LTV scenarios. Coming in with solid reserves is one of the simplest ways to improve your pricing.
Why Defy's Rates Are Competitive
Defy is a direct lender. We originate, underwrite, and fund the loans ourselves — no broker in the middle, no correspondent layer. When you get a quote from us, you’re talking to the people making the actual credit decision, not someone submitting your file and waiting.
We’re not the right fit for everyone. If you have a W-2 and a strong conventional profile, a conventional lender will likely offer a lower rate. Non-QM pricing exists because it solves a problem conventional lending can’t — qualifying on cash flow, bank statements, or assets instead of tax returns. The rate premium is the cost of that flexibility. For the borrowers we serve, it’s consistently worth it.
Most borrowers get a rate indication within 5 minutes of connecting with a mortgage consultant.
What Are Non-QM Mortgage Rates Right Now?
Non-QM mortgage rates vary by loan type, borrower profile, and property details.
As of March 2026, many Non-QM programs for well-qualified borrowers with 740+ credit scores and 75% LTV are currently pricing in the mid-6% range depending on the product. DSCR loans and asset depletion programs tend to price closest to conventional investor loans, while bank statement and P&L loans may carry a modest premium due to additional underwriting complexity.
Non-QM Mortgage Rate FAQs
Are Non-QM rates higher than conventional mortgage rates?
Yes, typically. Non-QM loans carry more underwriting flexibility and fall outside standard agency guidelines, which means they price at a premium to conventional 30-year rates. That gap has narrowed in recent years — DSCR loans in particular are now competitive with conventional investor property pricing in many scenarios. The tradeoff is qualification flexibility that conventional lenders cannot offer.
What credit score do I need for the best Non-QM rate?
740 FICO unlocks Defy's best pricing across all products. Defy's Non-QM programs are available down to 640 with some rate adjustment depending on LTV and product. A strong down payment and solid reserves can partially offset a lower score.
Can I get an interest-only Non-QM loan?
Yes. Defy offers interest-only options on DSCR, bank statement, P&L, and asset depletion programs. The rate premium is approximately 0.25% over the standard amortizing rate. For investors focused on monthly cash flow, the lower payment often makes sense even at the slightly higher rate.
Do DSCR rates vary by property type?
They can. Single-family rentals price best. Multi-family up to 9 units is available with a slight premium depending on the property. Short-term rentals and condotels can price slightly higher. Non-warrantable condos and co-ops are available on a case-by-case basis.
How quickly can Defy Mortgage lock a rate?
Most borrowers get a rate indication within 5 minutes of connecting with a Defy mortgage consultant. Official rate locks happen once the loan is in process. Most DSCR and Non-QM loans close in 21–30 days.
What is the minimum DSCR Defy Mortgage accepts?
Defy accepts DSCR loans down to 0.75. Sub-1.0 DSCR loans carry a rate premium relative to loans with a DSCR of 1.0 or better. Adequate reserves are required.
Example rates shown are not a commitment to lend and do not include discount points, fees, or APR. Rates current as of March 2026 and subject to change based on market conditions, borrower profile, and property details. Programs, guidelines, and availability may vary by state.
Author: Todd Orlando, Co-Founder & CEO of Defy Mortgage — 25 years of experience in Non-QM and investment property lending.