DSCR loan rates run above conventional owner-occupied rates — that's the price of qualifying on rent alone with no tax returns. But the spread isn't fixed: your ratio, down payment, credit, and property type each move the number. Here's how DSCR pricing actually works and how to get the best of it.
Where DSCR rates sit
Expect DSCR pricing roughly 1%-2.5% above comparable conventional rates, varying with the market and your file. Investor loans always price above owner-occupied — even conventional ones — so the honest comparison is DSCR versus a conventional investment-property loan, where the gap is much smaller.
The four levers that set your rate
First, the DSCR itself: 1.25+ earns better pricing than break-even. Second, loan-to-value: 25% down beats 20%. Third, credit: each 20-point band matters. Fourth, property type: long-term single-family rentals price best; short-term rentals and 2-4 units carry small premiums.
Rate buydowns and interest-only
Many DSCR lenders let you buy the rate down with points — often worth it on a long hold. Interest-only periods lower the payment (raising your qualifying DSCR) but the rate itself is typically a touch higher for IO.
When to refinance
DSCR loans commonly carry prepayment penalties (3-5 year step-downs), so time a refinance after the penalty burns off — or negotiate a shorter penalty up front if you expect rates to fall or rents to rise.
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