DSCR loan interest rates depend on the property, borrower and loan structure; there isn’t one rate every investor can get today. As of our October 14, 2026 review, Griffin Funding’s page, updated October 9, advertises 30-year fixed and five-year ARM options from 7.125%, and one-year ARMs from 5.99%. Those are advertised starting rates, not a national average or a quote for your property.
The useful comparison is a written offer with the rate, points, loan amount and prepayment terms on the same page. A lower headline rate can require more cash at closing or expose you to an earlier payment reset. This guide puts those tradeoffs into dollars using a fictional $350,000 rental purchase.
Research checked: October 14, 2026. The benchmark snapshot below is dated, not a live rate feed. All worked examples and widget defaults are educational assumptions. They don’t represent a lender offer or approval. This page is updated manually. The check date records when the linked sources were read; each benchmark also shows its own publication date. For current pricing, open the source and request a written lender quote. Report a changed figure or correction.
In this guide
- Current rate benchmarks
- What the rate spread means
- How lender pricing changes
- Quarter-point payment sensitivity
- Discount points and the breakeven calculator
- Five-year ARM versus fixed
- Rate locks and closing
Current DSCR loan interest rates: benchmarks
The latest verified figures are a 7.40% conventional 30-year average from Freddie Mac for October 8, 2026, and Griffin Funding’s advertised DSCR starting rates described below. They cover different borrower profiles and pricing terms. Subtracting one from the other won’t reveal the premium your rental-property loan should carry.
| Reference checked October 14 | Published rate | What the figure actually describes |
|---|---|---|
| Freddie Mac PMMS, October 8, 2026 | 7.40% | Weekly conventional 30-year fixed benchmark; not a DSCR or investment-property quote |
| Griffin Funding page, updated October 9 | From 7.125% | Advertised starting rate for 30-year fixed, 40-year fixed and five-year ARM options; actual pricing depends on the file |
| Same lender page | From 5.99% | Advertised one-year ARM starting rate; different reset risk from a five-year ARM |
| DSCR interest-only options | Obtain a written quote | Payment structure alone doesn’t establish an interest rate |
Freddie Mac’s PMMS uses a conventional borrower profile that includes owner-occupied, one-unit purchase properties and good or excellent credit. It stopped publishing ARM averages and average points in November 2022. Treat it as market context, not a rental-loan rate sheet.
Griffin Funding’s published DSCR page identifies credit score, coverage, down payment, points and prepayment terms as pricing inputs. Its starting figures don’t establish the points or terms you will receive. The table is a source snapshot, not an endorsement or lender ranking.
For a five-unit building or another commercial property, request the appropriate program. A one-to-four-unit rental product isn’t automatically a commercial term sheet. Keep loan purpose and property type consistent throughout the comparison.
The DSCR rate spread: compare matching loans
A DSCR rate spread is the difference between two rates being compared. If a conventional investment-property quote is 7.00% and a comparable DSCR quote is 8.00%, the spread is one percentage point, or 100 basis points. Both rates in that example are hypothetical.
The often-repeated claim that DSCR loans always cost 0.75 to 1.50 percentage points more is too rigid. Different collateral, income documentation, funding arrangements and repayment terms affect pricing. So do the points paid upfront. A zero-point offer and a two-point offer aren’t directly comparable even when their interest rates look close.
Ask each lender to price the same property, loan amount, payment structure and lock period. Specify equal discount points and equivalent prepayment terms. Then compare the required cash and payments. Where APR is supplied, use it to help compare financing charges, but also examine the actual fees and exit costs.
Conventional financing can use eligible rental income under its documentation rules; it isn’t limited to a salary alone. DSCR programs may qualify the transaction without using W-2s or personal tax returns for income qualification. Neither description removes credit, collateral or reserve review. Fannie Mae’s rental-income guidance shows why conventional treatment depends on the file.
“Non-QM” is also an imperfect shortcut. Many investor loans are business-purpose transactions, and the applicable consumer-mortgage rules can differ. Confirm the loan’s classification and the disclosures you will receive. Our DSCR loan guide explains the basic qualification methods.
Start with the rental property’s actual margin
Consider a $350,000 purchase with $70,000 down and a $280,000 loan. Monthly rent is $3,200. The fictional budget assumes 5% vacancy and $11,400 annual operating costs after that vacancy allowance.
| Operating calculation | Annual amount |
|---|---|
| Gross rent: $3,200 × 12 | $38,400 |
| Vacancy allowance: 5% | −$1,920 |
| Effective gross income, or EGI | $36,480 |
| Operating expenses | −$11,400 |
| Net operating income, or NOI | $25,080 |
Gross rent minus vacancy gives EGI. EGI minus operating expenses gives NOI. NOI divided by annual debt service gives NOI-based DSCR. The abbreviation is EGI, rather than EGO. Debt service in this example means scheduled principal and interest; taxes and insurance are already in operating costs.
At an illustrative 7.50% rate over 30 years, principal and interest are $1,957.80 monthly. Annual debt service is approximately $23,493.61, calculated before rounding. Coverage is 1.07, leaving about $132.20 monthly after the modeled expenses and debt payment.
A lender using rent divided by PITIA will produce a different ratio. Add $400 monthly taxes and $150 insurance to the payment, with no association dues, and PITIA is $2,507.80. Divide $3,200 rent by that amount and the result is about 1.28. That doesn’t change the operating budget’s $132.20 margin. For the full equation, see our step-by-step DSCR calculation guide.
Factors influencing your DSCR interest rate
LTV, credit score, coverage and prepayment terms can move a quote, but each lender sets its own pricing grid. A qualifying minimum isn’t necessarily the tier with the best rate. Request the actual adjustment for your scenario instead of applying a universal FICO surcharge.
LTV: price the cash requirement too
At 80% LTV, the example loan is $280,000. At 75%, it is $262,500 and the down payment becomes $87,500. That means another $17,500 goes into the purchase before closing costs.
Even if the rate stays at 7.50%, the smaller loan lowers principal and interest to about $1,835.44 monthly, saving $122.36. Some programs may also offer better pricing at the lower LTV. Obtain that second quote; don’t assume it. Read the down payment and reserve requirements alongside the rate.
Credit and coverage: use the lender’s definitions
Ask which credit score is used and whether the quote is conditional on a credit review. For DSCR, ask which rent figure enters the numerator and whether taxes, insurance and association dues enter the denominator. Changing either definition can move the file into another pricing tier.
1.00×, 1.25× and 1.35× are coverage ratios, not statutory lending thresholds. A lender can set a minimum or offer a different program below it. A property can also meet a rent-based test while producing limited cash after operating expenses. Our good DSCR ratio guide separates those questions.
Prepayment terms: give flexibility a price
A quote with a longer prepayment restriction may carry a different rate from a flexible alternative. Ask for both. Record when the charge applies, the calculation basis and the cost at your expected payoff date.
Suppose two hypothetical offers differ by $50 monthly, but the cheaper payment creates a $5,000 additional exit cost at the date you expect to refinance. Two years of payment savings total $1,200. That doesn’t cover the exit difference. Compare the whole holding period rather than stopping at the monthly payment.
What every 0.25% rate change does to cash flow
On the same $280,000 loan, a quarter-point move changes the monthly payment by roughly $46 to $49 across the range below. The effect isn’t a constant dollar amount. The payment equation depends on the rate, balance and number of payments.
| Illustrative rate | Monthly principal and interest | Monthly cash after modeled costs | NOI-based DSCR |
|---|---|---|---|
| 6.50% | $1,769.79 | $320.21 | 1.18 |
| 6.75% | $1,816.07 | $273.93 | 1.15 |
| 7.00% | $1,862.85 | $227.15 | 1.12 |
| 7.25% | $1,910.09 | $179.91 | 1.09 |
| 7.50% | $1,957.80 | $132.20 | 1.07 |
| 7.75% | $2,005.95 | $84.05 | 1.04 |
| 8.00% | $2,054.54 | $35.46 | 1.02 |
| 8.25% | $2,103.55 | −$13.55 | 0.99 |
| 8.50% | $2,152.96 | −$62.96 | 0.97 |
Keep NOI at $25,080 and the margin turns negative within this range. Major repairs, capital replacements and acquisition costs are outside the displayed monthly cash figure. Those need their own budget.
Use the chart below to change the loan amount, term or NOI. It calculates a separate payment at each quarter-point increment; it doesn’t retrieve mortgage rates. Changing its assumptions changes the chart and its accessible results table together.
Quarter-point rate sensitivity
Enter your assumptions. Each row uses the same loan amount and NOI with a different rate. Rates are illustrative; this tool has no live lender feed.
| Rate | Monthly P&I | Monthly cash | NOI DSCR |
|---|
Are discount points worth buying?
Buying points can make sense when the loan lasts long enough to recover the extra upfront cost. The first calculation is incremental cost divided by monthly payment savings. Then check the holding period, remaining balance and cash reserves. One point means 1% of the loan amount; it doesn’t guarantee a quarter-point rate reduction.
Imagine written offers for the same $280,000, 30-year loan: 7.50% without discount points or 7.00% with one point. Those are hypothetical terms. The point costs $2,800. Payments fall from $1,957.80 to $1,862.85, saving approximately $94.95 monthly. Simple breakeven is 29.49 months, so cumulative monthly savings first exceed the fee after 30 full payments.
At 24 payments, savings total approximately $2,278.89, below the fee. At 60 payments, savings are about $5,697.22, or $2,897.22 after the point cost. That is a payment-only comparison. The loans’ remaining balances also differ, and a complete payoff comparison includes those balances, other fees and any prepayment charge.
The CFPB’s explanation of points and lender credits stresses that the rate reduction depends on the lender, loan and market. Distinguish discount points from origination charges. A fee expressed as a percentage isn’t automatically buying a lower rate.
Interest rate buydown breakeven calculator
Compare two fully amortizing loans with the same starting balance and term. This assumes permanent rate discounts and fees paid in cash.
Excludes taxes, time value of money, prepayment penalties, changes in rate, and financed fees. The balance-adjusted comparison assumes payoff after the selected number of scheduled payments. It is a mathematical comparison, not a recommendation.
Keep the fee paid in cash for the widget’s simple comparison. If you finance it, the two loan balances are different and need a separate analysis. Also distinguish permanent discount points from a temporary payment buydown, which can subsidize early payments without changing the note rate.
Five-year ARM vs 30-year fixed
Choose fixed financing when payment certainty through a long or uncertain hold matters most. An ARM deserves consideration when its initial savings are meaningful and the property can withstand the contractual reset. A planned refinance isn’t guaranteed, so test keeping the loan past the initial period.
A 5/1 ARM generally fixes the rate for five years and adjusts annually afterward. A 5/6 ARM typically adjusts every six months after the initial five years. Verify the specific contract: the lender’s phrase “five-year ARM” doesn’t tell you the later adjustment frequency.
For a mathematical comparison, assume a five-year ARM starts at 7.00% and a 30-year fixed loan is 7.50%, both amortizing over 30 years with the same balance and fees. The initial ARM payment saves about $94.95 monthly. Sixty such payments save approximately $5,697.22 before fees and any later reset.
After those 60 payments, the ARM balance is about $263,568.45. If the contract permits a reset to 9.00%, amortizing that balance over the remaining 25 years produces about $2,211.86 monthly. That is a stress scenario, not a rate forecast. It shows why the reset deserves its own budget.
Read the index, margin, floor and caps. The fully indexed rate generally uses the specified index plus a margin, subject to the contract’s limits and rounding. Initial, subsequent and lifetime caps govern different adjustments; they don’t freeze your payment at its starting amount. The CFPB’s ARM cap guide explains the distinction.
Interest-only changes repayment, not just the rate
At 7.50%, interest-only payments on $280,000 are $1,750 monthly under a simple monthly-interest calculation. That’s $207.80 below the fully amortizing payment at the same rate. Principal remains outstanding during the interest-only period if you make only the required interest payment.
The payment can rise when principal repayment begins, particularly if the balance must amortize over fewer remaining years. Ask for that schedule and the lender’s qualifying payment. Use our interest-only calculation explanation before treating the initial payment as permanent.
Rate lock strategies for real estate closings
A rate lock protects the stated pricing for a defined period, subject to the agreement’s conditions. It doesn’t remove appraisal, eligibility or application-change risk. Confirm the expiration date in writing, including the time zone when timing is tight.
Ask whether the lock covers the quoted points and prepayment structure, what an extension costs, and whether a float-down provision exists. Match the period to a realistic closing schedule. A cheaper short lock can become expensive if title work or an appraisal pushes closing beyond it.
The CFPB’s rate-lock guidance explains why changed application details can affect locked pricing. For an investor loan, obtain the actual lender agreement and transaction-specific documents rather than assuming every consumer form applies.
Before committing, collect four items:
- A dated term sheet showing rate, points, principal and repayment schedule.
- A complete fee breakdown with cash required at closing.
- Written lock, extension and repricing conditions.
- Prepayment terms and a payment stress test that matches the contract.
Frequently asked questions
What are current DSCR loan rates today?
Our October 14, 2026 review found Griffin Funding advertising fixed and five-year ARM options from 7.125%, and one-year ARMs from 5.99%, on a page updated October 9. These are starting rates with file-dependent pricing, not guaranteed quotes. Get a dated written offer for your property.
Does one discount point reduce the rate by 0.25%?
Not necessarily. A point costs 1% of the loan amount, but the lender determines the rate reduction. Compare the actual zero-point and paid-point offers, including any other fee differences.
Can a lower rate improve my DSCR?
Yes, if the income measure stays the same and the lower rate reduces the debt payment used in your calculation. Confirm whether your lender qualifies using the note rate, an adjusted payment or another program-specific method.
Is an interest-only DSCR loan always cheaper?
Its initial payment can be lower at the same rate because principal repayment is deferred. The actual rate, fees, later payment and unpaid balance still matter. Compare the full schedule, not only the first payment.
Will a rate lock guarantee loan approval?
No. A lock and an approval are different commitments. The property, borrower and final loan terms must still satisfy the lender’s requirements and the lock agreement.
Next step: obtain matching written quotes, enter their rates into the chart, and test the point cost against your expected holding period. Bookmark this dated guide for repeat calculations; check fresh lender pricing each time. For seasonal rentals, use the Airbnb DSCR planning guide to verify the income assumptions first.
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