DSCR Loan Rates: What to Expect in Today's Market

How DSCR loan rates are priced

DSCR loan rates are priced off of benchmark indexes like the 5-year Treasury or the 10-year Treasury yield, plus a spread that reflects risk. The spread depends on the property, the borrower’s credit profile, and the deal’s DSCR ratio itself.

Because DSCR loans don’t use personal income documentation, lenders charge a premium above conventional investment property rates — typically 100–200 basis points higher. In exchange, borrowers get faster closings and no need for tax returns or employment verification.

What drives DSCR loan pricing

The biggest pricing factors are: FICO score (higher is better, with big jumps at 680, 720, and 760), DSCR ratio (higher is better, with optimal pricing typically at 1.25+), LTV (lower is better, with 70% LTV pricing meaningfully better than 80%), and property type (single-family and 2–4 unit usually price best).

Prepayment penalty choice also affects rate. Accepting a longer prepay period (3–5 years) typically lowers your rate by 25–100 bps compared to a no-prepay option.

How to lower your DSCR rate

Put down more: going from 80% LTV to 70% LTV can save 50–100 bps. Improve DSCR: a 1.25 ratio instead of 1.0 often saves another 25–75 bps. Accept a longer prepay: if you’re holding the property for 5+ years anyway, a 5-year prepay saves meaningful interest.

Shopping multiple lenders matters more than with conventional loans. DSCR pricing varies widely between private capital providers, and a 10-minute quote comparison can change your rate by half a point or more.