Investor loan DSCR rate update as of mid-March 2025

Interest rates have continued to drift downward since the new year 2025 after a rapid increase over the last four months of 2024.

Since the last update a month ago, the US Treasury 10-year note has gone down about 0.15% to 4.25% now (still +0.5% from 6 months ago):
USD 10 Years Interest Rate Swap Bond Historical Data – Investing.com

For DSCR-type loans (i.e. based on the income of the property and not the income of the borrower), here’s what to expect right now with the following kind of loan profile:

• Single-family home
• Purchase up to 80% LTV and cash-out refinance up to 75% LTV
• DSCR above 1.20 (can go down to 1.10 and perhaps 1.0 but a surcharge may apply)
• Personal credit above 700 gets a decent rate, need at least 660 to qualify

At max leverage (80% on purchase or R/T refinance) you can expect a rate of 7.1-7.2% right now with credit above 740 on a purchase or rate/term refinance. Rate increases would be needed for cash-out refinances (max 75% LTV), 2+ unit buildings, a shorter pre-payment penalty period, and lower personal credit.

Rates decrease with better credit and for lower LTVs/loan amounts. You might want to take 5% less than max leverage to save 0.2-0.3% on the rate.

Maximum buy down of ~4 points gives a ~6.3% floor rate.

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