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DSCR loan rates run above conventional owner-occupied rates, usually by about 1% to 2.5%, because you're qualifying on a property's rent with no tax returns and investor loans always price higher than owner-occupied ones. That's the trade. The good news: the spread isn't fixed. Your ratio, down payment, credit, and property type each push the number up or down.
We won't quote a live rate here, and you should be skeptical of anyone who does in an article, because pricing moves every week. Our rates page tracks the current market with a live weekly tracker.
What this guide gives you is more useful than a stale number: the levers that set your rate, and exactly how to pull them in your favor.
Expect DSCR pricing roughly 1% to 2.5% above a comparable conventional rate, depending on the market and the strength of your file. Two forces stack here:
The honest framing: you pay more to skip the tax returns and the personal DTI. For an investor who's capped out on conventional financing or whose returns understate their income, that premium buys something conventional loans simply won't sell, which is the ability to keep scaling. Our full DSCR loans in Texas guide covers the strategy side; this page focuses on price.
Put a rough number on it. On a $225,000 loan, a 1.5% higher rate costs somewhere around $200 a month versus a conventional investment loan. If the DSCR loan is the only way you can buy the property at all, because conventional capped you out or your returns won't support it, that $200 is the cost of doing the deal, not a penalty. Weigh it against the cash flow and appreciation the property brings, not against a conventional loan you can't actually get.
The strength of the deal itself moves your rate more than almost anything. A property that clears its payment comfortably is a safer loan, and safer loans price better.
This is partly in your control. Buying in a stronger rent market, or putting a little more down to shrink the payment, lifts the ratio and can drop your rate. Run the math before you write the offer with our DSCR calculator. A deal at 1.18 that you nudge to 1.26 with a slightly larger down payment can land in a better pricing tier.
Down payment and rate move together. Lower LTV means the lender has more cushion if they ever have to foreclose, so they charge less.
| Down payment | LTV | Effect on rate |
|---|---|---|
| 20% | 80% | Standard DSCR pricing |
| 25% | 75% | Noticeably better |
| 30%+ | 70% or lower | Best pricing tiers |
Going from 20% to 25% down often improves both your rate and your ratio at the same time, since the payment drops. On a long hold, that lower rate compounds into real money.
Income isn't verified on a DSCR loan, but credit is, and it prices in bands. Each roughly 20-point step can shift your rate.
If you're sitting just under a threshold, say 738, paying down a card or two before you apply can bump you into the next band and pay for itself many times over the life of the loan.
Not every rental prices the same. Risk to the lender varies by what you're buying and how it's operated.
An Airbnb can still be a great buy. Just price the rate premium into your returns instead of assuming it'll match a long-term single-family loan.
Most DSCR lenders let you buy the rate down by paying points up front. One point is 1% of the loan amount, paid at closing, in exchange for a lower rate.
The math is a break-even question. Divide the cost of the points by the monthly savings to find how many months until you come out ahead. Hold the property past that point and buying down wins; sell or refinance before it and you've overpaid.
Because DSCR is a business loan on an investment, points are generally a deductible expense, which improves the real-world math. Confirm with your tax advisor.
Many DSCR programs offer an interest-only period, often the first 10 years. It does two things at once:
The trade: the rate on an interest-only option is usually a touch higher, and you're not building equity through principal paydown during that window. For a cash-flow-focused investor who plans to refinance or sell before the IO period ends, it's often the right call. For a buy-and-hold-forever landlord, amortizing may serve you better.
Here's the cost most first-time DSCR borrowers miss. These loans commonly carry a prepayment penalty, often a 3-to-5-year step-down. A typical "5-4-3-2-1" structure charges 5% of the balance if you pay off in year one, 4% in year two, and so on down to zero after five years.
Why it exists: private investors fund these loans expecting a certain yield over time. Pay off early and they lose it, so the penalty protects their return, and in exchange your rate is a little lower than it would be otherwise.
How to work with it:
Most DSCR loans come as 30-year fixed, which is what long-term landlords usually want: a payment that never moves, so the ratio you underwrote holds for the life of the hold. Some programs also offer adjustable structures (a 5- or 7-year fixed period, then it adjusts) at a lower starting rate.
The choice tracks your plan:
Interest-only, covered earlier, layers on top of either. It's a cash-flow and qualifying tool, not a rate discount. Match the structure to how long you'll actually own the property, and don't reach for a lower teaser rate you won't be around to regret.
DSCR loans refinance the same way they purchase, on the property's numbers. Common reasons to pull the trigger:
The prepayment penalty is the gatekeeper on timing. Run the break-even including any penalty still owed, and if it still saves money, refinance. A rate that's dropped a full point can easily justify eating a small remaining penalty; a quarter-point move rarely does. Do the arithmetic rather than reacting to headlines. If you're weighing a cash-out on a Texas property, note the state's homestead rules mainly affect primary residences, not rentals, though our refinance guide is worth a look for the mechanics.
Points confuse a lot of investors, so here's the math on real numbers. Say you're borrowing $225,000 and the lender offers to drop your rate by paying one point.
Hold the property past about two years and the buydown pays for itself, then keeps saving every month after. Sell or refinance before month 25 and you lost money on the point. Because you're on the hook for a prepayment penalty on most DSCR loans anyway, buying down and holding long tend to go hand in hand. Since points on an investment loan are generally deductible, the real break-even often comes a bit sooner.
DSCR pricing isn't pulled from thin air. Lenders start with a base rate tied to the bond market, then add or subtract based on the risk factors in your file. Each factor carries a pricing adjustment.
Stack a few unfavorable factors, a 1.02 ratio, 80% LTV, a 665 score, on a short-term rental, and the adjustments compound into a noticeably higher rate. Flip them, a 1.30 ratio, 70% LTV, a 760 score, on a long-term single-family, and they compound the other way. This is why two investors quoted on the "same" DSCR loan can see very different rates. The file is the price.
Both are non-QM, so both price above conventional, but they're not the same. A bank statement loan is for a self-employed borrower buying a home to live in, and it qualifies on deposits. A DSCR loan is for an investment property and qualifies on rent.
Bank statement loans, being owner-occupied in most cases, tend to price a bit lower than DSCR loans on a comparable file, since owner-occupied loans carry less default risk than rentals. If you're self-employed and torn between buying a home to live in versus a rental, the financing cost is one input, though the bigger question is which purchase fits your goals. Our requirements guide lays out what each path asks of you.
Pull the levers you control, in order of impact:
Pull two or three of those levers together and the effect compounds, since each one shaves a pricing adjustment off the base rate. Over a 30-year hold, even a half-point improvement is thousands of dollars, which is why the work you do before you apply matters more than shopping a dozen lenders after the fact.
None of this is guesswork once you see your file. Texas Bank Statement Loans is not a lender and this isn't a commitment to lend; DSCR loans are private, non-QM products, not a government program, and we don't post live rates because they change weekly. What we do is help you structure the deal to earn the best pricing you qualify for. Start with our free 60-second eligibility check, no credit pull, no obligation. Check your eligibility.
See what you qualify for in 60 seconds, free and no credit check. Use the eligibility check at the top of this page.
Rates change weekly, so we don't post a live number in this guide. Our rates page tracks the current market. As a frame, DSCR loans generally run about 1% to 2.5% above comparable conventional owner-occupied rates.
Two premiums stack. Any loan on a rental prices above an owner-occupied loan because rentals carry more risk, and qualifying on rent instead of income makes the loan non-QM, so private investors fund it and price accordingly.
Push your DSCR to 1.25 or higher, put 25% or more down to lower LTV, keep your credit above 700, and pick a long-term single-family property. Buying points can lower the rate further if you hold the property long enough to break even.
Often yes, commonly a 3-to-5-year step-down such as 5-4-3-2-1. Paying off early triggers a fee on the balance. In exchange, your rate is a little lower. Time any refinance for after the penalty burns off, or negotiate a shorter one up front.
Not usually; the rate on an interest-only option is typically a touch higher. What it lowers is your monthly payment, which raises your qualifying DSCR and can push a marginal deal into approval or a better pricing tier.
Moving from 20% to 25% down (80% to 75% LTV) noticeably improves pricing, and 30% or more reaches the best tiers. More down also shrinks the payment, which raises your ratio and can improve the rate a second way.
Because a DSCR loan is a business loan on an investment property, points are generally a deductible expense, which improves the real cost of buying down the rate. Confirm the specifics with your tax advisor.
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