Current investment property interest rates

4 Replies

I have been wondering wat are the current rates for investment properties?

Hi @Kevin Lenertz are you asking rates from traditional lenders or hard money and/or private lenders. I can address the latter two. 

Hard money is a short term loan option, usually 12 months, and the payments are interest only with the principal due at maturity in a balloon payment. There is no income verification. It is asset-based lending; the focus will be on the subject property's value. The rates will be high here, around 10-14%. This loan product is usually reserved for a fix & flip or a buy/rehab/refinance project for a rental property that needs a little rehab work. 

If you're looking for private money, that can be 10-30 years. The payments are usually a mix of interest + principal. There are fixed options (although those seem to be less offered) and adjustable rates. Here, there is no proof of income, the underwriting is done to the rental property's income. Rates will be between 7.00% - 9.99%.

I was wondering about traditional lenders

Right around 5%. What you can do is look at the weekly average rates survey from Freddie Mac, and and add 0.75% to 1.5% on top of those rates to get what the rate will be for an investment property instead of a owner occupant rate.  The amount you add will vary based on the specifics of the lender, loan product and the borrowers qualifications.

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