I am looking to buy a rental using a DSCR loan and the rates my broker is quoting are much higher than what I'm finding using a Google search. Wondering what rates the community has been seeing lately on DSCR Loans.
With 15% down he’s quoting close to 8%. With 20% he said he can get it to maybe 6.9%. Property is shooting off great cash flow well over a 1.5 DSCR. Do these rates sound about right?
Lender · Cincinnati, OH · Member since 2025 · 59 posts · 23 votes
8mo
Hello Tre,
My team and I do a number of DSCR loans and the rates tend to be in the low 7's right now. I'm not sure which state you're purchasing in but I can help either way with the way my company is structured. Can you shoot me a PM and I'd be happy to share more details. Thanks!
I am looking to buy a rental using a DSCR loan and the rates my broker is quoting are much higher than what I'm finding using a Google search. Wondering what rates the community has been seeing lately on DSCR Loans.
With 15% down he’s quoting close to 8%. With 20% he said he can get it to maybe 6.9%. Property is shooting off great cash flow well over a 1.5 DSCR. Do these rates sound about right?
Thanks!
There is not such thing as "the" rate for any loan, but DSCR takes that to a different level. As with any loan the loan to value (how much you are putting down), credit score, unit count, loan size, purchase/rate term refi vs cash out all effect the rate pricing. Also, like all loans the more upfront costs you pay at closing the lower the rate will be, but you must make sure that makes the most sense with your likely hold period.
BUT with DSCR loans you must factor in the DSCR number, and importantly the pre-payment length and cost. For example, most DSCR loans are quoted at a 5 yr PPP as that will get you the "best" rate but is that the best loan? maybe. but usually not.
And then with DSCR loans you need to understand that there are dozens if not more sets of guidelines depending on who the end investor is. (Investor means huge firms like Apollo, Goldman, Blue Owl who buy the individual loans, package them up and sell them as bonds) The dozens of programs all have very slight but very important differences that effect pricing. For example:
* Most programs require landlord history where some do not.
* most programs require you own a primary residence where some are ok if you rent or living rent free.
* some programs require you have at least 6 months reserves while others only 2 months or none.
* Some programs will limit the number of properties you have while others have no limit.
Those are just a few of the common examples but there are more. As you might expect the programs that are easier with their requirements the end investors demand a little bit of a premium in the form of a higher rate.
Due to all the complexities, there are a lot of stories n BP about I was abut to close and the broker raised the rate on me. Well, the rate went up because they either purposely or more then likely just did not know the program well enough that they quoted. So, it is VERY important to understand details matter and if your broker is not asking these questions before quoting you might be in for a surprise down the road, and of course just comparing rates on google will not tell you the story.
I am looking to buy a rental using a DSCR loan and the rates my broker is quoting are much higher than what I'm finding using a Google search. Wondering what rates the community has been seeing lately on DSCR Loans.
With 15% down he’s quoting close to 8%. With 20% he said he can get it to maybe 6.9%. Property is shooting off great cash flow well over a 1.5 DSCR. Do these rates sound about right?
Thanks!
It depends on your credit and how much he is charging for said rate, but these are not bad quotes. If you shop it, you might get lower rates/fees but also keep in mind you are putting yourself at risk, trusting a new lender you never worked with to get the deal done.
Besides just the rate/terms, make sure whoever you reach out to is reputable.
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