What interest rates are you getting from traditional banks?

47 Replies

@Account Closed Don't get me wrong if I absolutely had to get a balloon I would. And chances are when yours comes due your bank will just roll it and all will be fine. But there will be some moment in time where you, your building or more likely the USA is not financeable (is that a word?). And you really just don't want your balance due anywhere near there. I don't worry about rising rates, falling prices or much of anything else. Any or all of my loans coming due along with all my places going vacant are my worst case scenarios. And there are plenty of banks who will loan without a balloon and I'm pretty good and keeping my units full so that's how I sleep at night. 

@Andy N. 90% of banks offer 30 year fixed at around 4% if they can "conform" to Fannie/Freddie guidelines.

I've purchased 3 properties this year, all around 4%:

Investment 4unit in March - 25% down, $315k loan - 4.25% 30yr fixed with 0.7 pts

Investment 4unit in August - 30% down, $336k loan - 3.99% 30yr fixed, 0.5 pts

Primary OO SFR in October - 20% down, $625k loan - 3.75% 30yr fixed, 0 pts

Why worry with balloons, short term fixed, or variable rates? Conform to Fannie/Freddie, and lock in these historical low rates for 30 years. In 20 years we'll be laughing at how low our payments are.

We just closed on our first SFD with a local bank. 20% down, 20 year amortization, matures every 5 years and our rate is 5.52%. We have pretty good credit. We are so new to all of this so I'm sure that's why we were saddled with that rate.

Originally posted by @Katie Caldwell :

We just closed on our first SFD with a local bank. 20% down, 20 year amortization, matures every 5 years and our rate is 5.52%. We have pretty good credit. We are so new to all of this so I'm sure that's why we were saddled with that rate.

 Is the property rural? If you have good credit, verifiable income, and 20% down, you should have no problem securing a 30 year fixed rate mortgage around 3.75%. I'm tagging @Chris Mason because I know he can help. 

I just talked to a couple of banks and of course these are an estimate and can change depending on many factors but was told 4.125%-4.5% for a 30 year with 20-25% down.

@Saj Shah it is not a rural location. I work in commercial lending at a credit union and our rates are usually 3.5% to 5%. The bank we went through doesn't amortize beyond 20 years for commercial lending.

Ok so you got a commercial loan. Is it a commercial building? I assumed SFD stood for "single family dwelling". 

Do you own it in an LLC? Is that why you got a commercial loan?

Looks to me like you have better options out there, some being a 2% better rate. Just my two cents. 

I get prime+1% with floor of 5%, 25 year term with 4 adjustments, 20% down.

With a 30 year conventional with JP Morgan Chase I was approve for 3.5% interest rate with a 10% money down in CT for 2 unit.

Hi @Josh V. !

Great question.

I just did a cash-out refi on one of my 3-unit properties. Interest rate was 4.375%, on a 30-year loan with 30% down. My credit score is in the 730-750 range. 

Hope that helps.

Just closed on a 4-plex in Albuquerque with 25% down and a 4.5% 30 year fixed rate. This was with Leader One Financials. 

Did a multi-unit, non-owner occupied, cash out refi, 30yr fixed 4.25% late last spring (2016)

In California 70% LTV.

Originally posted by @Nicole Lybrand :

4.5% and 4.65%, 20 % down. SFHs. Borrower income. 

@Pat Heidingsfelder does your credit union lend out of state. 

 I don't believe they lend out of state.  You can surely try!  It is Keesler Federal Credit Union.

3.75% 25% down no points for a 4-unit investment property (10-year loan). Working with a mortgage broker who is located where the property is located - she's been solid, so far. A local bank is doing the loan as well. 

Closing on a duplex Friday at 4.5% for a 30 year fixed, investment property with excellent credit and 20% down in PA. Exact same rate for a sfh in SC in August with same terms.

Once the first ten investment property loans are done, what interest rates to expect for further loans

I am being quoted mid six percent range for single family rentals in Memphis

Any referrals will help

@AJ Singh I have some contacts, for you and @Emily Powell if you need some local bank connections, I'd be happy to share my contacts.

Memphis is on fire! We have had 5 families in town this week to view properties. Mostly Californians who had never been to Memphis, but now own rental property here. Great cashflow and great values on fully turnkey properties.

@James Wachob - I'm certainly open to new contacts.  I'm not sure which "local" you're referring to (Memphis, perhaps?). I currently own in Houston and Kansas City but always looking for opportunities to expand the portfolio.  Feel free to send me a PM with more info.  Thanks!

We have a 5/25 for 3 homes. 2 of the homes the bank let us put into 1 loan. We are at 5% right now which is not bad. From what we have heard from every investor who has used them is that they always lower your interest rate after the 5 year, so long as you always paid on time, unless you just do not keep up your property. I really think it may depend on the bank when it comes to Balloons. 

Originally posted by @Emily Powell :

@Nicholas W. - That's a great rate.  Are you using a local bank/credit union?

 Emily, yes it is a small local bank with just 3 branches in the Milwaukee area.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Join the Largest Real Estate Investing Community

Basic membership is free, forever.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.