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As of [January, 2026], HomeAbroad’s DSCR loan interest rates typically range from 6.12% to 6.62%. Actual rates vary based on factors such as DSCR ratio, loan-to-value (LTV), property type, and overall deal structure.
Interest rates play a critical role in the true cost and performance of a DSCR loan. Even small differences in pricing can significantly impact monthly cash flow, long-term returns, and overall investment profitability especially for income-focused real estate investors.
From our experience underwriting DSCR loans, understanding why rates differ matters just as much as knowing the rate itself. Factors like rental income strength, property cash flow, and risk profile often determine whether an investor lands at the lower or higher end of the rate range.
In this guide, we break down current DSCR loan interest rates, explain what drives them, and show how they can affect you as an investor.
Pre-qualify for a DSCR Loan in a Few Clicks.
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Table of Contents
Current DSCR Loan Interest Rates [January, 2026]
As of [January, 2026], the starting average HomeAbroad’s DSCR loan interest rate is 6.12%, given the ideal lending conditions, such as a good DSCR ratio, favorable LTV, and strong credit score. For foreign national investors, they generally fall in the 6.75% to 7.25% range, reflecting the additional risk considerations tied to cross-border lending.
These figures represent baseline ranges. Actual rates can move higher or lower depending on factors like property cash flow strength, DSCR coverage, LTV, property type, and overall risk profile of the investment.
DSCR Loan Interest Rates vs Conventional Mortgage Rates
DSCR loan rates are typically higher than conventional mortgage rates because DSCR underwriting relies more heavily on property income, execution, and investor-specific risk factors than borrower W-2 income and standard agency guidelines.
From an investment perspective, interest rates matter, but they are rarely the deciding factor on their own. As the saying goes, “marry the house, date the rates.” Strong cash flow, sensible leverage, and long-term demand tend to matter more than trying to time marginal rate movements.
Instead of waiting, you can start building equity in your property, and you can always refinance if rates go even lower, which is highly unlikely in the near future.
Before moving forward, the key is reviewing the numbers against your investment strategy. When the deal works on fundamentals, interest rate timing becomes secondary.
Want to know more about the rates? Here is how the DSCR loan interest rate is calculated.
How DSCR Loan Interest Rates Are Calculated
DSCR loan interest rates are not fixed. When we underwrite DSCR loans to investors, we adjust the rates based on a combination of property performance, deal structure, and overall risk profile. Understanding these factors helps investors position their deals more effectively and qualify for better pricing.
Below are the key factors that shape DSCR loan interest rates.
1. DSCR Ratio
The Debt Service Coverage Ratio (DSCR) measures how well a property’s rental income covers its debt obligations. It is calculated by dividing the property’s gross rental income by its total monthly or annual debt payments, including PITIA (principal, interest, taxes, insurance, and HOA fees).
For example, if a property's gross income is $120,000 yearly and the total debt obligation is $100,000, the DSCR will be 1.2. This number means the property generates 20% more income than its total debt obligations.
A DSCR of 1 or higher is required for a DSCR loan, as it shows sufficient income to cover the mortgage and other necessary expenses.
The DSCR ratio affects interest rates as well as loan approval. Based on our experience structuring DSCR loans, properties with a higher DSCR ratio tend to qualify closer to the lower end of the rate range, while lower ratios usually trigger pricing adjustments.
To get a quick estimate of your own property’s ratio, you can use our DSCR calculator and see how it may influence the rates you qualify for.
Here is a representation of how DSCR loan rates are adjusted with different DSCR ratios.
2. Credit Score
While DSCR loans are qualified based on a property’s income rather than personal income, credit history is still reviewed as part of the overall risk assessment.
A stronger credit profile generally supports more competitive pricing, while lower scores may result in rate adjustments that can often be offset with higher equity or stronger cash flow.
At HomeAbroad, we offer DSCR loans for foreign national investors that do not require a US credit history. Based on our experience working with international buyers, we focus more on the strength of the rental income, DSCR ratio, and deal structure rather than relying solely on traditional credit benchmarks.
Pre-qualify for a DSCR Loan in a Few Clicks.
No Paystubs, W2s, or Tax Returns Required.
Here is a tabular representation of how different credit score ranges and LTV affect interest rates. The table below shows the rate adjustments based on credit score and LTV. For example, if your credit score is 700 and the LTV is 70%, we will increase the base rate by 0.5%.
Note that this table is just an estimate, and the actual adjustment may vary.
While there is a minimum credit score requirement of 620 for DSCR loan qualification for domestic clients, international real estate investors do not need US credit score, income, or tax returns.
3. LTV (Loan-to-Value)
The Loan-to-Value (LTV) ratio shows the percentage of a property that is financed through borrowing.
For example, an 80% LTV ratio means you borrowed 80% of the property’s purchase price and paid 20% of the down payment.
Lower LTVs reduce risk by increasing equity in the property, which often results in more competitive interest rates. Higher LTVs carry more risk and typically lead to pricing increases.
Down payment strategy is one of the most effective levers investors can control when aiming for better DSCR loan terms.
4. Investor Experience
This is no financial metric, but an important one that we consider during DSCR loan application evaluation. If you have a track record of successful investments, you are more likely to generate potential income from your property than someone just starting.
However, this is not mandatory, and new investors can qualify for a DSCR loan without any prior experience.
5. Short-term Rentals/Airbnb
Short-term rental properties have inconsistent income due to factors such as occupancy rates, seasonal demand, and competition. This makes the lender’s income projection difficult and increases perceived risk.
You must have understood by now that higher risk in lending means higher rates, cash reserves, more down payment, etc.
The DSCR loan interest rate for a short-term rental property might be 0.5% to 1% higher than a similar property rented out long-term.
Investors should weigh the potential for higher revenue against the increased borrowing costs to determine whether short-term rentals align with their investment strategy.
6. Mortgage Type
The structure of a DSCR loan also affects the interest rate. Common DSCR mortgage types include:
-
Fixed-Rate: A fixed-rate DSCR loan has the same interest rate for the entire loan term, typically 30 years, offering stable and predictable monthly payments. - Adjustable-Rate (ARM): An adjustable-rate DSCR loan starts with a lower introductory rate for a set period, after which the rate adjusts periodically based on market conditions.
- Interest-Only: An interest-only DSCR loan allows you to pay only interest for a defined initial period before principal payments begin. This option may carry a rate premium of around 0.2%–0.5% due to the added risk.
7. Refinance
There is usually higher rates when refinancing or cashing out than when providing initial property financing. This adjustment is generally around 0.2%.
This rate increase is mainly due to the higher risk associated with refinancing, particularly cash-out options. In such cases, we extend additional credit based on the property’s equity, thereby increasing their risk exposure.
These factors help shape your final DSCR loan interest rates. Rethink your borrowing strategy based on these factors to secure lower interest rates.
At HomeAbroad, we focus on structuring DSCR loans around your investment goals. We study your case to customize our loan terms and maximize investment returns. The complete process is online, and our mortgage officer will help you throughout your investment journey.
Hear from our client Liam and Emma Thompson, a Canadian couple who bought a Hawaiian Rental Property, about how we helped them.
Despite having no US credit history, HomeAbroad guided us to the perfect DSCR loan, allowing us to invest in a stunning property in Lahaina. The process was smooth, and the rental income is covering our mortgage. We couldn’t be happier with their expert support and highly recommend them to any foreign national looking to invest in the US.
Liam and Emma Thompson,Lahaina, Hawaii
You may come across DSCR loan offers advertising very low interest rates. Don’t rush into a decision. In DSCR financing, the headline rate alone rarely reflects the true cost or suitability of the loan for your investment strategy.
What to Look for When Comparing DSCR Loan Interest Rates
When comparing DSCR loan options, it’s important to evaluate the full structure of the loan, not just the interest rate. Small differences in terms can have a meaningful impact on cash flow, flexibility, and long-term returns.
Here are the key factors to review:
- Interest rate vs APR: APR includes the interest rate plus certain loan costs and fees, which makes it useful when comparing total cost across offers.
- Prepayment penalties: Restrictions or fees that limit your ability to refinance or exit early.
- Total loan cost: The combined effect of interest rate, fees, and loan structure over the life of the loan.
- Ongoing support and clarity: Clear communication and guidance throughout underwriting and beyond closing.
- Upfront and hidden fees: Origination charges, points, and processing fees that increase the overall cost of the loan.
- Points and lender credits: Discount points are a tradeoff: you pay more at closing to reduce the interest rate. Lender credits are the reverse tradeoff: you accept a higher rate to reduce upfront costs.
From our experience working with real estate investors, these factors often have a greater impact on long-term returns than the headline interest rate itself. Small differences in fees, prepayment flexibility, or execution timelines can materially affect cash flow and exit options.
At HomeAbroad, we offer DSCR loans tailored for foreign investors, reviewing each deal beyond just the rate. Our loan experts look at rental income strength, loan structure, and overall execution so investors understand the full picture before committing, without surprises after closing.
This approach helps international real estate investors move forward with clarity, confidence, and financing that aligns with how they actually invest in US real estate.
Ready to get started? Apply for a DSCR loan with HomeAbroad and get the best loan terms tailored to your investment goals today.
Pre-qualify for a DSCR Loan in a Few Clicks.
No Paystubs, W2s, or Tax Returns Required.
Frequently Asked Questions
Is the DSCR loan worth the higher interest rate?
DSCR loans allow investors to qualify based on the property’s income rather than their personal income. These loans offer great flexibility and the ability to finance multiple properties simultaneously, making them worth considering despite the higher rates.
Why are DSCR loan interest rates higher than those of conventional loans?
DSCR loans are priced around property income strength, leverage, and execution risk, not W-2 underwriting and agency guidelines. That difference in underwriting approach can translate into different pricing.
Can I buy down the rate on a DSCR loan?
Yes, you can buy down the rate on a DSCR loan. Paying discount points is one common way to reduce the interest rate in exchange for higher upfront costs.
Are DSCR loan interest expenses deductible for rental property owners?
The IRS generally allows mortgage interest deductions as a rental expense, subject to your specific facts and tax situation. Review IRS guidance and consult a qualified tax professional for your case.
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