Current investment property rates
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Today’s mortgage rates for investment properties
Mortgage rates on investment properties are higher than rates for primary residences. “A very general rule of thumb would be to expect to pay 1 to 2 percent more on an investment loan versus an owner-occupied loan," says Jessica Vance, a loan officer at California-based Anchor Funding.
That’s because lenders view investment properties as risky compared to primary residences. If you plan to rely on the rental income from a tenant to contribute to (or cover) the mortgage payments for the investment property, there’s a greater possibility you could default on the loan if your tenant fails to pay rent.
Current demand for investment mortgages
While mortgage rates have remained higher than many buyers would like, the elevated borrowing costs aren't standing in the way of some real estate investors. Vance says the current market for DSCR — Debt Service Coverage Ratio — loans is hot. These loans let investors qualify based on how much income they will make from a rental, rather than relying on traditional methods such as W-2s and tax returns for the application process.
“Our borrowers are utilizing these loans to leverage [them] into multifamily properties, fix them up and re-rent them at higher rates,” Vance says. “This forces appreciation on a property and is scalable for our investor clients with large portfolios.”
There are some signals, however, that investors are beginning to stand back. Investor residential purchases in the second quarter of 2025 dropped to the lowest level for that time of year since 2020, a recent Redfin analysis shows.
If you're considering a mortgage for an investment property, the chart below shows current rates for mortgages on a primary residence to provide a baseline:
National mortgage rates by loan type
| Product | Interest Rate | APR |
|---|---|---|
| 30-Year Fixed Rate | 6.32% | 6.39% |
| 15-Year Fixed Rate | 5.53% | 5.63% |
| 30-Year Fixed Rate FHA | 6.36% | 6.42% |
| 30-Year Fixed Rate VA | 6.42% | 6.47% |
| 30-Year Fixed Rate Jumbo | 6.42% | 6.47% |
Rates as of Monday, September 15, 2025 at 6:30 AM
Factors influencing investment property mortgage rates
Lenders typically determine fixed-rate mortgages based on several factors:
- 10-year Treasury yields. Most fixed-rate mortgages are benchmarked off of 10-year Treasury yields.
- Investor demand. Lenders adjust rates based on what investors are buying.
- A risk cushion. Because investment properties are considered riskier than primary residences or even vacation homes, lenders then add extra cushion to compensate for the possibility of loss. This cushion varies not only by lender but also by your financial profile. A borrower with more debt, a lower credit score or both is likely to get a higher mortgage rate quoted than a borrower with a better financial profile.
How to get an investment property mortgage
Here are some tips to get an investment property loan at the best possible rate:
- Get your credit and down payment in order: Well before applying for an investment property loan, take steps to improve your credit score (or maintain an already-strong score) and organize the funds for a down payment and closing costs. In general, lenders give the best rates to borrowers with a credit score of 740 or higher and a higher down payment than the lender’s minimum requirement.
- Take stock of debt: Now’s the time to pay down or pay off debt and understand your debt-to-income (DTI) ratio, which impacts the interest rate on your loan. If you own more than one property, your lender will want to know about any mortgages on it. Ditto for debt like a car loan or student loan. If you plan to buy the investment property through an LLC, your lender might want to see paperwork tied to that, too.
- Compare rate quotes: When you’re ready to look for properties, get rate quotes from at least three mortgage lenders. These might include a community bank, credit union or a lender you’ve done business with before. A mortgage broker can also help you find the right loan. Because fewer lenders finance investment properties, this takes a bit more work compared to shopping for a conventional loan on a primary residence. Consider the APR, or annual percentage rate, which reflects the interest rate and any lender fees and points.
- Research borrower experience: Before you decide to go with a lender, see what others have to say about it. Read consumer reviews, check its status on review sites and see if it's been awarded a J.D. Power award for servicing.
Types of investment property mortgage loans
There’s a variety of options for financing an investment property:
- Conventional loans: These widely available mortgages are offered by banks, credit unions and other lenders, who typically resell them to Fannie Mae or Freddie Mac. For a conventional investment property loan, you’ll typically need to put down 15 to 25 percent.
- Portfolio loans: Some lenders offer portfolio loans, which are not sold to secondary market investors but instead held in the lender’s portfolio. The benefit of a portfolio loan is that it may have more flexible guidelines than a conventional loan for an investment property.
- DSCR loans: A type of non-QM loan, debt-service coverage ratio (DSCR) loans are underwritten based on the income generated by the investment property.
- Non-warrantable condo loans: If the investment property is a condo, your best option could be this type of specialty mortgage.
Investment property loans vs. conventional loans
Rates on loans for investment properties are higher, typically by half a percentage point or more. Here’s an example comparing the payments on a 30-year, fixed-rate loan on a $400,000 home with 20 percent down:
| Conventional Loan | Investment property loan | |
|---|---|---|
| Loan amount | $320,000 | $320,000 |
| Interest rate | 7% | 7.75% |
| Monthly payment (Principal and interest) | $2,129 | $2,293 |
| Total interest paid over 30 years | $446,428 | $505,307 |
An investment property loan lender might require a down payment of at least 15 percent, for example, while a conventional loan for a primary residence usually only requires 3 percent down.
Key points to consider
Borrowing money to purchase a home you don't plan to live will have some similarities to one you plan to occupy – lenders will look at your outstanding debts, your income and your credit history to see how confident they feel you'll be able to repay the money. However, there are some notable differences, too.
| Investment property loans | Primary residence loans | |
|---|---|---|
| Availability | Not offered by every mortgage lender | Offered by virtually all mortgage lenders |
| Rates | Often have higher interest rates | Lower conforming loan limits, plus jumbo (non-conforming) options |
| Requirements | Stricter credit, debt-to-income (DTI) ratio and down payment requirements | Standardized credit, down payment and DTI ratio requirements with most mortgage lenders |
| Property types | For one- to four-unit properties | For one-unit properties or owner-occupied multifamily properties |
| Potential tax benefits | Possible to deduct mortgage interest (within IRS guidelines), plus rental expenses | Possible to deduct mortgage interest (within IRS guidelines) |
Pros and cons of investment property mortgages
Pros of investment property loans
- You can borrow more compared to a conventional conforming loan. Investment property mortgages don’t have set loan limits, unlike conforming loans.
- You don’t have to live on the property. Unlike a loan for a primary residence, you don’t have to live on the property to get an investment property loan.
- You can deduct mortgage interest. If you itemize your tax return, you can deduct mortgage interest, as well as other rental expenses.
Cons of investment property loans
- You’ll have a higher interest rate compared to a loan for a primary residence. Investment property mortgages are riskier for lenders. Added risk translates to higher interest rates.
- You’ll need to meet stricter underwriting requirements. When compared to a mortgage for a primary residence, investment property mortgages often require more cash reserves, a better credit score and a higher down payment.
Investment property FAQ
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