Current DSCR rates

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Noah WrightBusiness Member
USA, Nationwide · Member since 2024 · 174 posts · 89 votes
1y
Quote from @Matthew Tyson:

Just trying to get a gauge on current DSCR loan rates. Curious what those who are looking at BRRRR refi's are getting quoted at, all things being equal.


 6-7% best case

7-8% base case

9-10% worst case

beyond that we move to bridge/hardmoney options

9-10% best case

11-12% base case

12-14% worst case

17% SOS Emergency (avoid imminent insolvency, worst day of borrowers life, etc...)

Speaking broadly, of course

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  • Noah WrightBusiness Member
    USA, Nationwide · Member since 2024 · 174 posts · 89 votes
    1y
    Quote from @Matthew Tyson:

    Just trying to get a gauge on current DSCR loan rates. Curious what those who are looking at BRRRR refi's are getting quoted at, all things being equal.


     6-7% best case

    7-8% base case

    9-10% worst case

    beyond that we move to bridge/hardmoney options

    9-10% best case

    11-12% base case

    12-14% worst case

    17% SOS Emergency (avoid imminent insolvency, worst day of borrowers life, etc...)

    Speaking broadly, of course

    [email protected]737-773-3717
    13Reply
    • Calvin Thomas
      Developer · New York City, NY · Member since 2015 · 812 posts · 718 votes
      1y
      Quote from @Noah Wright:
      Quote from @Matthew Tyson:

      Just trying to get a gauge on current DSCR loan rates. Curious what those who are looking at BRRRR refi's are getting quoted at, all things being equal.


       6-7% best case

      7-8% base case

      9-10% worst case

      beyond that we move to bridge/hardmoney options

      9-10% best case

      11-12% base case

      12-14% worst case

      17% SOS Emergency (avoid imminent insolvency, worst day of borrowers life, etc...)

      Speaking broadly, of course


      At those higher rates, what's the point?
      1Reply
    • Noah WrightBusiness Member
      USA, Nationwide · Member since 2024 · 174 posts · 89 votes
      1y
      Quote from @Calvin Thomas:
      Quote from @Noah Wright:
      Quote from @Matthew Tyson:

      Just trying to get a gauge on current DSCR loan rates. Curious what those who are looking at BRRRR refi's are getting quoted at, all things being equal.


       6-7% best case

      7-8% base case

      9-10% worst case

      beyond that we move to bridge/hardmoney options

      9-10% best case

      11-12% base case

      12-14% worst case

      17% SOS Emergency (avoid imminent insolvency, worst day of borrowers life, etc...)

      Speaking broadly, of course


      At those higher rates, what's the point?

       Many reasons, terrible credit or recent bankruptcy, still wants to invest in a great profit opportunity. Some people have balloon payments coming due and have no other option. Spend long enough fielding calls and you'll see it all.

      [email protected]737-773-3717
      0Reply
  • Matthew TysonPro Member
    OP
    Investor · San Antonio, TX · Member since 2022 · 43 posts · 42 votes
    1y

    Thanks Noah!

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    1Reply
  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    1y
    Quote from @Matthew Tyson:

    Just trying to get a gauge on current DSCR loan rates. Curious what those who are looking at BRRRR refi's are getting quoted at, all things being equal.


    There are so many variables like location, down payment, your credit, prepayment, DSCR score etc. but we are seeing rates in 7's right now, possibly buy down into hte 6's but the recent spike back up in the ten year spiked up, two weeks ago you could have gotten into the 6's.

    always happy to provide people term sheets to see where rates are at.

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  • Tom Thomson
    Member since 2019 · 57 posts · 34 votes
    1y

    Just closed a DSCR loan a few weeks ago with 20% down. rate was 7.25 % with no points.

    6Reply
    • Sayeed Mohammed
      Member since 2024 · 1 post · 0 votes
      1y
      Quote from @Tom Thomson:

      Just closed a DSCR loan a few weeks ago with 20% down. rate was 7.25 % with no points.


       with whom?

      0Reply
  • Mike GrudzienPro Member
    Lender · Eugene, OR · Member since 2019 · 2k+ posts · 1k+ votes
    1y

    Noah,
    I like how you broke down the rates by category.

    2Reply
  • Brittany MinocchiBusiness Member
    Lender · Massillon, OH · Member since 2022 · 1k+ posts · 486 votes
    1y

    7s with no points for the most part, but it ultimately depends on LTV, loan amount, FICO, your investment experience, how long you've owned the property, whether its a single family or 2-4 units, whether it's leased....not all lenders care about everything I listed, but just some things to consider!

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  • Matthew TysonPro Member
    OP
    Investor · San Antonio, TX · Member since 2022 · 43 posts · 42 votes
    1y
    Quote from @Matthew Tyson:

    Just trying to get a gauge on current DSCR loan rates. Curious what those who are looking at BRRRR refi's are getting quoted at, all things being equal.


    Thanks everyone. Assume experienced investor, no buy down, 1.25 DSCR, 75% LTV, Texas.

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    0Reply
  • Deven Ziertman
    Member since 2025 · 77 posts · 15 votes
    1y

    Current DSCR loan rates are typically 6-8%, with the possibility of getting into the 6% range with a buy-down. Rates can go up to 9-10%, depending on factors like location, credit, and DSCR score.

    1Reply
  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    1y
    Quote from @Matthew Tyson:

    Just trying to get a gauge on current DSCR loan rates. Curious what those who are looking at BRRRR refi's are getting quoted at, all things being equal.


    Like others have stated, it depends on the scenario. It can be anywhere from 6-12%. Keep in mind DSCR loans also have LLPAs. Unless you have a cookie cutter deal, high downpayment with killer credit and a nice 1.25 DSCR, you will likely be in the high 6s at par

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  • Jeremy Horton
    Rental Property Investor · Somewhere over the Rainbow · Member since 2021 · 1k+ posts · 1k+ votes
    1y

    A 30 year fixed rate is at 6.9 today - a conventional mortgage is generally the best you are going to get 

    I would expect DSCRs to be 8% plus right now - depending on a few factors like prepayment penalty/credit score etc 

    I would seriously doubt anyone will beat a conventional mortgage w/ a DSCR mortgage in either rates or terms

    This is why you would generally max out your conventional mortgages first, then go to a DSCR. A conventional mortgage is simply the best you can get.

    1Reply
    • Matthew TysonPro Member
      OP
      Investor · San Antonio, TX · Member since 2022 · 43 posts · 42 votes
      1y
      Quote from @Jeremy Horton:

      A 30 year fixed rate is at 6.9 today - a conventional mortgage is generally the best you are going to get 

      I would expect DSCRs to be 8% plus right now - depending on a few factors like prepayment penalty/credit score etc 

      I would seriously doubt anyone will beat a conventional mortgage w/ a DSCR mortgage in either rates or terms

      This is why you would generally max out your conventional mortgages first, then go to a DSCR. A conventional mortgage is simply the best you can get.


      All my properties are purchased and refi'd in an LLC. Not doing conventional. I closed a DSCR at 7.25% about a month ago. I don't do anything that I can't get to 1.15 minimum and aim for 1.25+. The goal is to purchase cash, rehab, rent, then refi pulling all my money out. Conventional is not an option as the goal is not to leave money sunk in the deal.

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    • Jeremy Horton
      Rental Property Investor · Somewhere over the Rainbow · Member since 2021 · 1k+ posts · 1k+ votes
      1y
      Quote from @Matthew Tyson:
      Quote from @Jeremy Horton:

      A 30 year fixed rate is at 6.9 today - a conventional mortgage is generally the best you are going to get 

      I would expect DSCRs to be 8% plus right now - depending on a few factors like prepayment penalty/credit score etc 

      I would seriously doubt anyone will beat a conventional mortgage w/ a DSCR mortgage in either rates or terms

      This is why you would generally max out your conventional mortgages first, then go to a DSCR. A conventional mortgage is simply the best you can get.


      All my properties are purchased and refi'd in an LLC. Not doing conventional. I closed a DSCR at 7.25% about a month ago. I don't do anything that I can't get to 1.15 minimum and aim for 1.25+. The goal is to purchase cash, rehab, rent, then refi pulling all my money out. Conventional is not an option as the goal is not to leave money sunk in the deal.


      I could almost guarantee your LLC is penetrable and likely useless. Do you have an LLC per property? Parent LLC? Umbrella Insurance? Yea you're likely personally liable anyway if you get sued

      We all understand the BRRRR model here, it's not that novel of an idea. And guess what - I can do the same with a conventional mortgage, end up with better terms/rate than you, transfer the property to an LLC and hold the property LLC with a parent LLC. Maybe useless but likely less useless than your set-up. Buy cash, rehab, cash-out refi into conventional.

      0Reply
    • Mark Sullivan
      Member since 2018 · 13 posts · 1 vote
      1y
      Quote from @Jeremy Horton:
      Quote from @Matthew Tyson:
      Quote from @Jeremy Horton:

      A 30 year fixed rate is at 6.9 today - a conventional mortgage is generally the best you are going to get 

      I would expect DSCRs to be 8% plus right now - depending on a few factors like prepayment penalty/credit score etc 

      I would seriously doubt anyone will beat a conventional mortgage w/ a DSCR mortgage in either rates or terms

      This is why you would generally max out your conventional mortgages first, then go to a DSCR. A conventional mortgage is simply the best you can get.


      All my properties are purchased and refi'd in an LLC. Not doing conventional. I closed a DSCR at 7.25% about a month ago. I don't do anything that I can't get to 1.15 minimum and aim for 1.25+. The goal is to purchase cash, rehab, rent, then refi pulling all my money out. Conventional is not an option as the goal is not to leave money sunk in the deal.


      I could almost guarantee your LLC is penetrable and likely useless. Do you have an LLC per property? Parent LLC? Umbrella Insurance? Yea you're likely personally liable anyway if you get sued

      We all understand the BRRRR model here, it's not that novel of an idea. And guess what - I can do the same with a conventional mortgage, end up with better terms/rate than you, transfer the property to an LLC and hold the property LLC with a parent LLC. Maybe useless but likely less useless than your set-up. Buy cash, rehab, cash-out refi into conventional.

      How do you get a conventional loan on a duplex without it being a primary residency?
      0Reply
  • Matthew TysonPro Member
    OP
    Investor · San Antonio, TX · Member since 2022 · 43 posts · 42 votes
    1y

    Not interested in blowing out my personal DTI. But, thanks.

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    • Jeremy Horton
      Rental Property Investor · Somewhere over the Rainbow · Member since 2021 · 1k+ posts · 1k+ votes
      1y
      Quote from @Matthew Tyson:

      Not interested in blowing out my personal DTI. But, thanks.


      To keep from asking this question again you can take a conventional mortgage rate (since it's the best deal) and add 1-2%. Wah Lah - a DSCR rate. Then add another 2% since we like to underwrite conservatively. There you go. Easy rule of thumb for you.

      0Reply
    • Noah WrightBusiness Member
      USA, Nationwide · Member since 2024 · 174 posts · 89 votes
      1y
      Quote from @Jeremy Horton:
      Quote from @Matthew Tyson:

      Not interested in blowing out my personal DTI. But, thanks.


      To keep from asking this question again you can take a conventional mortgage rate (since it's the best deal) and add 1-2%. Wah Lah - a DSCR rate. Then add another 2% since we like to underwrite conservatively. There you go. Easy rule of thumb for you.


       This guy is not a lender. Also incorrect.

      [email protected]737-773-3717
      0Reply
    • Jeremy Horton
      Rental Property Investor · Somewhere over the Rainbow · Member since 2021 · 1k+ posts · 1k+ votes
      1y
      Quote from @Noah Wright:
      Quote from @Jeremy Horton:
      Quote from @Matthew Tyson:

      Not interested in blowing out my personal DTI. But, thanks.


      To keep from asking this question again you can take a conventional mortgage rate (since it's the best deal) and add 1-2%. Wah Lah - a DSCR rate. Then add another 2% since we like to underwrite conservatively. There you go. Easy rule of thumb for you.


       This guy is not a lender. Also incorrect.


      Quote him and let's see how far off I am. Bet it's not much

      0Reply
    • Jay HurstBusiness Member
      Lender · Dallas, TX · Member since 2017 · 1k+ posts · 1k+ votes
      1y
      Quote from @Matthew Tyson:

      Not interested in blowing out my personal DTI. But, thanks.

      There are plenty of reasons to do a DSCR loan in a LLC, but protecting your debt to income ratio is not one of them. The income/loss of the property/LLC (no matter what type of loan it is) will flow through to your personal tax returns. Any loan that tax returns are required like a primary residence loan will take into account the income/loss.

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  • Mike Klarman
    Specialist · NJ · Member since 2022 · 1k+ posts · 650 votes
    1y

    For 1 - 4 units, 720+ credit: 7.5%ish.  I've seen lower at a few outfits and some have a buy down option that lets you get as low as 6.5%.

    0Reply
  • Matthew TysonPro Member
    OP
    Investor · San Antonio, TX · Member since 2022 · 43 posts · 42 votes
    1y

    @Noah Wright I have him ignored. I can't read his posts anymore, not even sure what he said originally but I recall it being ignorant. 

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    0Reply
    • Chris SeveneyBusiness Member
      Moderator
      Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
      1y
      Quote from @Matthew Tyson:

      @Noah Wright I have him ignored. I can't read his posts anymore, not even sure what he said originally but I recall it being ignorant. 


       what are you getting quoted out of curiosity?

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  • Mike Klarman
    Specialist · NJ · Member since 2022 · 1k+ posts · 650 votes
    1y

    I have RCN's pricing model. I plugged in a phone 30 year DSCR purchase loan for a credit of 760. The par rate is 8%, you can guy as low as 7%.

    I have Roc Capitals pricing model as well, they are at a par rate of 7.5% for the same kind of property, you can buy as low as 6.6% with them.

    That's two of the biggest HML out there, so it gives you a sense of what is available.

    0Reply
    • Connor Hibbs
      Lender · Ellington, CT · Member since 2024 · 210 posts · 103 votes
      1y
      Quote from @Mike Klarman:

      I have RCN's pricing model. I plugged in a phone 30 year DSCR purchase loan for a credit of 760. The par rate is 8%, you can guy as low as 7%.

      I have Roc Capitals pricing model as well, they are at a par rate of 7.5% for the same kind of property, you can buy as low as 6.6% with them.

      That's two of the biggest HML out there, so it gives you a sense of what is available.


      I can't speak to Roc, but I know for sure that RCN is not at a par rate of 8% with a 760 score. I just priced out a SFR purchase at 80% LTV and 5-Year 5% PPP and got a par rate of 7.05% and the max buydown got it to 6.0083%.

      0Reply
  • Connor Hibbs
    Lender · Ellington, CT · Member since 2024 · 210 posts · 103 votes
    1y

    Assuming a decent FICO Score you should be in the 7's for the most part with max LTV. You'll be able to get into the 6's with a slightly lower LTV or buying down with points, but you shouldn't be above an 8% rate unless you're doing an 80% cash-out or if you have a 5+ unit property then you may be over the 8 mark.

    0Reply
  • Noah WrightBusiness Member
    USA, Nationwide · Member since 2024 · 174 posts · 89 votes
    1y

    Again, this highlights why you should be taking advice from actual lenders who do this all day every day, who see thousands of proposals, not some guy who got a bad deal and has an axe to grind forever now.

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    0Reply
  • Mike Klarman
    Specialist · NJ · Member since 2022 · 1k+ posts · 650 votes
    1y

    I was using the previous sizer.  They have a new release in may that is a little lower.  Like 7.7%/7.6% for a par.  I've closed dozens and dozens of loans with RCN.  It also depends on 80% or 75% leverage on a purchase.

    0Reply
  • Alex BekezaBusiness Member
    Lender · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes
    1y

    6s and 7s Check out the link in my BP's profile page bio section because you can plug and play with our DSCR pricing engine and get dialed in rates/terms/fees with a few clicks.

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  • Jeremy Horton
    Rental Property Investor · Somewhere over the Rainbow · Member since 2021 · 1k+ posts · 1k+ votes
    1y

    @Mark Sullivan

    You would simply just do a conventional loan - it doesn't need to be a primary residence for a conventional loan. You may be thinking of an FHA type loan - that would need to be your primary residence.

    Downside of conventional loan - sure it counts towards your DTI (i wasn't particularly worried about this). Now...the loan is in your name as well - after you close simply transfer the property to your LLC. Viola

    0Reply
  • Mike Klarman
    Specialist · NJ · Member since 2022 · 1k+ posts · 650 votes
    1y

    I do not know what sizer you have but it is not mine. I just priced out a 200k purchase with a 760 credit and a 1.5 DSCR and I did an address in Indy which is a decent market and the par was 7.4% at 80% leverage, so I have no idea how you are getting 7.0%. This is on the 5/12 sizer so it's brand spanking new. RCN has not been at 7.0% PAR for I wanna say over a year, maybe more. My best friend works there as a L/O, I close dozens of loans yearly with RCN mostly all are DSCR loans b/c they are way back in the market for bridge loans.

    0Reply
  • Stacy RaskinBusiness Member
    Lender · Member since 2022 · 1k+ posts · 503 votes
    1y

    Depending on credit and LTV, rates are generally in the high 6s and throughout 7s as of the date on this post. If the credit is very low, will be higher.

    As far as what goes into DSCR rates and how the program works:

    DSCR loans won't use your income to underwrite the loan. DSCR loans are based off of down payment or equity in the property if a refinance, credit score and either actual or market rents so it helps to supercharge an investor's real estate goals and net worth.

    Here's a bit more in detail about how rates are calculated for DSCR loans:

    1. Credit score- the higher the best. 760-780+ generally gets best pricing for investment property loans with most lenders. From there every 20 point increment affect pricing differently. So for example, a 761 credit score will be in the 760-779 credit category, then going down to 740-759 and so on.

    2. Loan to value ratio: The higher the loan to value ratio (LTV) is, pricing takes a hit. So your pricing will be higher for a 80% LTV loan than for a 60% LTV loan.

    3. Prepayment penalties- usually 1-5 year terms. The shorter the prepayment term has an impact on increasing the rate.

    4. Are you cash flowing the property? More on how that is calculated below. Is your DSCR ratio greater than 1-meaning are you cash flowing (according to the lender's criteria of mortgage, property taxes and insurance (and HOA) if applicable). Many lenders will not do a DSCR loan unless cash flowing. If they will do a loan with less than 1, the pricing takes a hit. This criteria is for 1-4 and 5-8 unit programs.

    I've included an example below to help illustrate this.

    So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.

    See example below:

    DSCR < 1

    Principal + Interest = $1,700

    Taxes = $350, Insurance = $100, Association Dues = $50

    Total PITIA = $2200

    Rent = $2000

    DSCR = Rent/PITIA = 2000/2200 = 0.91

    Since the DSCR is 0.91, we know the expenses are greater than the income of the property.

    DSCR >1

    Principal + Interest = $1,500

    Taxes = $250, Insurance = $100, Association Dues = $25

    Total PITIA = $1875 Rent = $2300

    DSCR = Rent/PITIA = 2300/1875 = 1.23

    If a purchase, you also generally need reserves / savings to show you have 3-6 month payments of PITIA (principal / interest (mortgage payment), property taxes and insurance and HOA (if applicable). If a cash out refinance, many lenders will allow the cash out to satisfy the reserves requirement.

    DSCR lenders generally let you vest either individually or as an LLC. It's a great way to increase your net worth and these loans can also be used to pull cash out of a property as it appreciates allowing you to reinvest money into new deals.

    Happy to connect to discuss further. 

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  • Charletta Goodman
    Florence, SC · Member since 2018 · 24 posts · 1 vote
    1y

    @Tom Thomson Can you share who you used and your experience?

    0Reply
  • Alex BekezaBusiness Member
    Lender · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes
    1y

    I have a link in the BIO section of my BP profile where you can see today's DSCR rates with just a few clicks. You simply enter some basic details on the scenario and get instant rates/terms/payments etc where you can toggle things like LTV/FICO/etc to see how it changes things. We don't even ask for a name or number unless you like the terms and want to take next steps.

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  • Timothy Hero
    Lender · United States · Member since 2020 · 1k+ posts · 499 votes
    1y

    Not sure if you're still asking, but my lowest rate guys are quoting 6.9 - 7.2% for the best credit borrowers. Avg credit (700-739), expect around 7.5%.

    0Reply
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