
Wondering what interest rates you can expect to pay on loans for investment properties?
It depends on your credit score of course, and on your other risk factors as a borrower. But it also largely depends on what type of investment property loan you borrow.
Here are rough ranges for today’s mortgage rates on rental properties, depending on the type of financing you get.
Cheat Sheet: Mortgage Rates on Rental Properties
We get into detail on all of these loan types below — which you should read, you lazy bum — but here’s a quick comparison chart for mortgage rates for investment properties today:
Owner-Occupied Mortgages for House Hacking | Conventional Mortgages for Investment Properties | Long-Term Portfolio Mortgages | Short-Term Fix & Flip Loans | Private Lenders & Seller Financing | |
---|---|---|---|---|---|
Where to Check Rates | Try Credible | Try Credible | Try Kiavi, Visio, LendingOne, or Patch Lending | Try Kiavi, LendingOne, Civic, or New Silver | Ask people you know! |
Loan to Value (LTV) | 80-97% | 80-97% owner-occ, 75-80% investors | Up to 80% | Up to 90% + 100% of renovation costs | Negotiable |
Credit Score | 500+ | 620+ | 600+ | 575+ | No minimum |
Debt-to-Income Ratio (DTI) | 28% - 36% | 28% - 36% | No income docs required | No income docs required | No income docs required |
Cash Reserve Requirements | 6-12 mos.' payments | 6-12 mos.' payments | 0-6 mos.' payments | 0-6 mos.' payments | None |
Interest Rates | 4.5% - 7.99% | 5.75% - 9.5% | 6.5% - 9.9% (ARMs) / 6.9% - 10.9% (fixed) | 7.9% - 14% | Negotiable |
Repayment Term | 15 or 30 Years | 15 or 30 Years | 3/1 ARM, 5/1 ARM, 7/1 ARM, or 30-year fixed | 6-18 Months | Negotiable (usually a balloon) |
Time to Funding | 30-60 Days | 30-60 Days | 10-30 Days | 7-30 Days | Negotiable |
Loan Limits | $50,000 - $1,867,274 (multifamily) | $50,000 - $1,867,274 (multifamily) | $75,000 - $2M | $75,000 - $2M | Negotiable |
Report to Credit Bureaus? | Yes | Yes | No | No | No |
Where to Apply | Try Credible | Try Credible | Try Kiavi, Visio, LendingOne, or Patch Lending | Try Kiavi, LendingOne, Civic, or New Silver | N/A |
6As you can see, loans for investment properties cost more than homeowner mortgages. But that doesn’t mean you can’t take out an owner-occupied mortgage for a rental property.
Owner-Occupied Multifamily Loans (House Hacking)
Homeowners get the cheapest mortgage loans available. So how can you take out an owner-occupied mortgage loan for a rental property?
You could buy a property with a homeowner mortgage, move in for a year, then move out and keep it as a rental. But there’s a better strategy to build your real estate portfolio faster: house hacking.
When you house hack a multifamily property, you buy a 2-4 unit building and move into one of the units. You rent out the other units, whether on a long-term lease agreement or as short-term rentals on Airbnb. That rental income ideally covers your mortgage payment, and maybe even your repair and maintenance costs.
Best of all, you can use a traditional homeowner mortgage. And after living there for a year, you can move out, either to do it all over again or move into a single-family home.
Other ideas for house hacking include:
-
- Finished basements or lofts which can be rented out separately
- Additional dwelling units on a property (for example, guest houses)
- Multi-bedroomed homes where you can rent out extra bedrooms to tenants
Beyond offering lower interest rates, you can also score a lower down payment with an owner-occupied loan. Perhaps as low as 3%, when you house hack with a Fannie Mae loan.
Today’s Owner-Occupied Mortgage Rates:
-
- 15-Year Fixed Interest: 4.63% – 7.75%
- 30-Year Fixed Interest: 5.5% – 8.36%
Check Current Rates At: Credible
Pros:
-
- Lowest possible interest rates for investment property loans
- Lowest possible down payment for loans for investment property
Cons:
-
- Not scalable: most lenders only allow four mortgage loans on your credit report
- Your tenants will live with or near you
Conventional Rental Property Mortgages
Most new real estate investors think first of conventional mortgages, when brainstorming loans for investment properties. You probably worked with one when you bought your own home, so you instinctively call up the same mortgage lender.
But these lenders limit the number of mortgages allowed on your credit report. They typically stop lending to you once you have four mortgages reporting on your credit.
That makes conventional loans for investment properties a good fit for your first rental property or two, but not scalable after that.
Expect a down payment requirement in the 20-30% range for conventional loans for investment properties.
Today’s Conventional Rental Property Mortgage Rates:
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- 15-Year Fixed-Rate Loan: 6.15% – 8.9%
- 30-Year Fixed-Rate Loan: 6.375% – 9.5%
Check Mortgage Interest Rates At: Credible
Pros:
-
- Lower interest: often lower investment property mortgage rates than portfolio lenders
Cons:
-
- Not scalable: most lenders only allow four mortgage loans on your credit report
- Conventional real estate investor loans are reported to credit bureaus, and too many mortgages on your credit report will wreck your credit
- They usually don’t allow mortgage loans to LLCs and other legal entities
- Minimum credit score: most types of loan require a score of at least 620, often 660 or higher
- Lenders verify your personal income tax returns and check your debt-to-income ratio
- Slow to settle: minimum 30 days, typically
- Lots of paperwork and headaches
Instant Rate Quote from Lendency
Portfolio & Hard Money Loans
With conventional loans for investment properties capped at around four properties, where else can you get financing?
Portfolio lenders don’t sell your loan immediately after closing, the way that conventional lenders do. Instead, they keep the loans within their own portfolios (hence the name).
Most also offer short-term purchase-rehab loans — hard money loans — for buying and renovating fixer-uppers. So investors using the BRRRR strategy can often refinance their hard money loan into a long-term portfolio loan, with the same lender.
Portfolio lenders offer affordable and scalable real estate investor loans. As collateral-based lenders, they’re more interested in putting the property under the microscope than you as the borrower. Often they don’t even require income documentation.
Still, your credit score matters. The better your credit, the lower your interest rate and down payment, and the more lenders will consider you at all. While you can still potentially get an investment property loan with bad credit, start working on improving your credit for more options and cheaper loans.
In general, portfolio lenders require similar down payments as conventional lenders, in the 20-30% range.
As a final note, some community banks and credit unions also offer portfolio loans for investment properties. Try calling around if you want to compare pricing with the online lenders below.
Today’s Mortgage for Rental Property Rates:
-
- Adjustable Rate Mortgages (ARMs): 6.5% – 9.9%
- 30-Year Fixed Interest Loans: 6.9% – 10.9%
- Short-Term Fix & Flip Loans: 7.9% – 14%
Check Investment Property Mortgage Rates At: Kiavi, Visio, LendingOne, and Patch of Land
Pros:
-
- Scalable: no limit on the number of mortgages
- Don’t report to the credit bureaus
- Allow loans to LLCs and other legal entities
- Fast: many can settle within 10-21 days
- No income documentation required, for many lenders
- Allow purchase-rehab loans
Cons:
-
- Sometimes more expensive than conventional mortgages (although they now offer competitive rates)
- Decent credit required: most require a score of at least 620, sometimes 680
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Private Loan for a Investment Property
As you gain experience as a landlord and establish a track record of success, people you know might want to get on your rental investment gravy train. Private loans from individuals offer an infinite source of funding for seasoned property investors.
These loans from friends and family gives you ultimate flexibility. You negotiate the terms directly with the lender, from points and fees to interest rates to the loan term. Investment property owners may pay higher interest rates, but you may also avoid origination points and junk fees at closing. While that doesn’t improve your monthly cash flow, it still reduces your total borrowing costs.
If they know and trust you, they may not even pull your credit report. And they likely won’t ask for income documentation either.
They don’t report on your credit, and you can scale private loans indefinitely.
But if you default, you risk damaging your personal relationships and credibility.
Private Loan Interest Rates: Negotiated between you and your lender.
Pros:
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- Scalable: no limit on borrowing
- Don’t report to the credit bureaus
- Potentially no upfront loan fees or points added to closing costs
- Allow loans to LLCs and other legal entities
- Fast: you can potentially settle immediately
- No credit requirements
- No income documentation required
- Flexible loan term
Cons:
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- You need to establish a track record of success in your real estate investments before borrowing money from individuals
- Potential for damaging your credibility and personal relationships
Seller Financing (Owner Financing)
When you borrow money privately, it doesn’t have to be from a friend, family member, or anyone else you know well. Why not borrow from the seller?
While they may not have thought of the idea on their own, many sellers warm to the idea of owner financing after you explain it to them in full. They hold the promissory note, and you make monthly mortgage payments to them on loan terms you negotiate.
Like other types of private financing, everything is negotiable. Many sellers don’t want to hold the note for the next 30 years, so offer them a balloon mortgage. With a balloon loan, you negotiate a earlier deadline for paying off the remaining loan balance.
Imagine the seller inherits a property outright from a family member but can’t afford to renovate the property. Instead of paying taxes and local fees for a vacant property they can’t live in or rent out, they provide you with owner financing and turn the property into a source of income.
You negotiate a 6% interest rate, with the loan amortized over 30 years, and a five year balloon payment. So you make monthly payments as if it were a 30-year fixed mortgage at 6%, but by the end of five years you need to either sell it or refinance it to pay the owner the rest of their balance in full.
Private Loan Interest Rates: Negotiated between you and your lender.
Pros:
-
- Scalable: no limit on borrowing
- Don’t report to the credit bureaus
- Allow loans to LLCs and other legal entities
- Fast: you can potentially settle immediately
- No credit requirements
- No income documentation required
- Flexible loan term
Cons:
-
- Not always available: many sellers aren’t open to owner financing
Final Thoughts
Getting a loan for an investment property can be an overwhelming and tricky business. Novice real estate investors often don’t know where to start.
House hacking is an excellent springboard into rental property investing. You qualify for a primary residence mortgage, with its low interest rate and high loan-to-value ratio (LTV). But you can still buy a multifamily property, and only have to live there for a year.
Conventional mortgages also offer low mortgage rates on rental properties. But with strict caps on the number of mortgages on your credit report, these rental property loans aren’t scalable. Once you hit four mortgages, you have to look elsewhere.
If you’re serious about growing your portfolio, you’ll have to get creative in finding loans for investment properties. Consider online portfolio lenders, private lenders, and seller financing, not just traditional mortgages.
Or better yet, get creative with these clever ways to cover a down payment.♦
What are you seeing among interest rates for investment property loans? Any questions about loan for investment property rates? We’d love to hear your thoughts on loan options below!
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About the Author

Yvonne Reilly is a landlord, property investor and solopreneur, passionate about helping people become financially independent and realizing their FIRE dreams. As a freelance writer, editor and digital marketer, she also helps small businesses connect with their audience and build traction.
Thanks for sharing!
Glad it was useful Anna!
Excellent overview! I had no idea online lenders didn’t report the loans to credit bureaus. They must still record the mortgage correct? The conventional lenders still see that as a mortgage right?
So you can have 4 loans with an online lender and still get denied a conventional loan?
Getting loans for rental properties has gotten a LOT easier since I started using portfolio lenders instead of trying to force a loan through conventional lending guidelines. I’m hoping to gradually shift to private lenders as time goes by, but for now I’m happy with the rental loan terms I’ve been getting from online lenders.
I’ve always thought of financing/getting the loan for a rental property as one of the trickier parts of investing. After reading this list I can see I’ve been WAY too narrow in my approach to financing.
Thanks for the ideas!
Yeah financing rental properties isn’t as hard as many new investors believe, but it takes a holistic approach. You want as many options in your “tool kit” as possible. Best of luck with your next rental property purchase Henry!
Can I take out a loan to help buy real estate inside of my Self-Directed retirement account?
Yes you can, but the lent portion of the property ownership doesn’t get the same tax advantages.
Thanks for the info!
Glad it was useful Miss JD!
Great piece of information. Thanks for sharing!
Thanks Shane!
So many options for loans. That’s awesome!
Glad you found them useful Steven!
Thanks for the very timely tips and tricks!
You got it AE!
It’s time to leverage before the ber months come! Thanks for the share!
Haha, love it Sampang
Thanks for the update!
You got it Aaron!
These are great creative financing options for this coming off-season. I love buying when everyone else shies away
Amen Mark!
Wonderful! I’ve been looking for other loans for my 1st rental property. 2023 is going to be my year!
Glad to hear it Evans!