Foreign National Mortgage Rates: How to Calculate?

Current foreign national mortgage rates range from 8% to 9%, reflecting the higher risk associated with no US credit history.

Foreign national mortgage rates

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Foreign National Loan Program is for foreign investors who want to buy an investment property in the USA. If you wish to finance your next purchase through a foreign national mortgage program, it is vital to learn all about the foreign national mortgage rates.

Mortgage rates are one of the most important factors you must consider while purchasing an investment property in the USA. It directly impacts your overall budget, repayment capacity, and profitability.

This article will highlight all the important aspects of foreign national mortgage rates to help you make an informed decision and crack the best deal. So, keep your notes ready!

When planning to purchase a property overseas, the first thing that you must do is empower yourself with relevant knowledge. Knowing how to calculate the interest rate all by yourself is one of the most crucial pieces of information that foreign investors must know.

Also read, Guide to Foreign National Mortgage Loans with No US Credit.

Latest Foreign National Mortgage Rates 2023

Foreign National Mortgage Rates for US Newcomers and Recent Immigrants

Current foreign national mortgage rates are between 7.8% to 8.99% (3 July 2023).

As of 03 July 2023, the interest rate for a 30-year fixed-rate mortgage is 6.71%, however as newcomers and immigrants typically have no credit or thin credit history, lenders will assess your creditworthiness based on your international credit report, and your interest rate will be 50 – 75 bps (.5%-0.75%) higher than the current mortgage rates.

Foreign National Mortgage Rates for Foreign National Investors

The interest rate remains the same as above (6.71%), with 50-75bps(.5%-0.75%) higher for investors. Also, you need to put down a higher downpayment(40%) than the standards.

Foreign investors also have an option of DSCR loans, which require a lower downpayment (20-25%), but interest rates may be higher by 1-2% compared to current mortgage rates. This may vary from lender to lender, so make sure you shop around and choose the best lender. We can help you connect with the best foreign national mortgage lender for you.

How do I calculate Foreign National Mortgage Rate?

There are three ways to calculate the foreign national mortgage rate. You may use an online calculator or calculate it manually through the loan amount. Following are the three ways for your reference.

1. Online Mortgage Loan Rate Calculator

You can use an online calculator to find your monthly payment and interest. All you will have to do is feed the information being asked. Usually, you’ll have to put the following details,

  • Loan amount
  • Number of years
  • Annual interest rate
  • Value of your Principal.
  • Click on “Calculate”

The online calculator can also help you compare mortgage plans and decide between a 15-year loan and a 30-year loan plan.

2. Calculate Mortgage Interest Manually

To calculate the interest on the loan, we will first calculate the monthly payment. We can apply the answer to the above-mentioned method and calculate the interest. The monthly payment equation is as follows: These variables represent the following inputs:

M = P [ I ( 1 + I )^N ] / [ ( 1 + I )^N – 1 ]

Foreign national mortgage payment equation
Source: Insider

To find the monthly payment amount “M,” you need to fill in the following three numbers from your loan:

  • You need to determine “M” as in your monthly payment, and to do that; you will need to put these important numbers below:

As discussed above-

  • P is the Principal Amount
  • I is the Interest Rate
  • N is the Monthly mortgage payments (number of periods)

It will help calculate your monthly mortgage payments if you know your principal amount, interest rate, and the number of periods.

Note that the formula only calculates the monthly Principal using which you can calculate interest. (Follow the method 2 formula after finding the principal amount)

For calculating monthly payments, read Foreign National Mortgage Calculator: Estimate Your US Mortgage Monthly Payments.

By using any of the following methods of calculation, you can figure out the interest amount and make an informed choice. Additionally, it is also important to keep track of various factors that impact the foreign national mortgage rates, like federal reserve monetary policy, inflation, etc. The next segment will help you understand which factors affect foreign mortgage rates and why?

What Factors Affect Foreign National Mortgage Interest Rates?

Foreign national mortgage interest rates depend on many factors. Awareness of these factors is highly beneficial for investors as they can anticipate an upcoming swell or dip in interest rates and budget their purchase accordingly.

1. Federal Reserve Monetary Policy

Federal Reserve is the central bank of the USA and executes monetary policies that directly impact Foreign National Mortgage Rates. Therefore, the decision to raise or lower interest rates immediately impacts mortgage loan rates available in the market. As of December 14, 2022, the Federal Reserve interest rate was between 4.25% to 4.50%

It is a major factor affecting Foreign National Mortgage Interest Rates. The way Federal Reserve Board implements its monetary policy directly affects interest rates. Whenever there is a change in money supply resulting from Federal Reserve’s intervention, it leads to an increase or decrease in Foreign National Mortgage Rates respectively.

2. Inflation

Inflation plays an important role in Foreign national mortgage interest rates. If the inflation rate is high, mortgage interest rates will also be high. On the other hand, when the inflation rate is low, mortgage interest rates will also come down.

Mortgage lenders consider it as one of the critical factors while financing mortgage loans. They intend to maintain interest rates at a level enough to overcome the erosion of the dollar’s value. It helps them secure a real net profit on their interest returns.

For example, if mortgage rates are at 5%, and the annual inflation is at 2%, the real return earned by lenders is only 3%. As a result, mortgage lenders always base the interest rate on the inflation rate and adjust accordingly.

The current real estate market trend is another factor affecting Foreign National Mortgage Rates. A trendy market brings tremendous opportunities for lenders and investors as there is an increase in demand for mortgage loans. In such a situation, lenders make more profits than when the market is dull.

4. The Rate of Economic Growth

The rate of economic growth also affects Foreign National Mortgage Rates. The country’s GDP, unemployment, and inflation directly affect Foreign National Mortgage Interest Rates. Investors should always keep an eye on the economic conditions to make sure that they are making the right decision while executing purchase agreements.

5. The Bond Market

The bond market affects Foreign National Mortgage Rates as well. Foreign National Mortgage Rates are based on the yield of bonds and mortgage-backed securities. When bond yields rise, Foreign National Mortgage Interest Rates increase as well. The opposite holds true when bond yields decline.

To sum it up, Foreign National Mortgage Rates depend on many factors, including the Federal Reserve Monetary Policy, Inflation, Real Estate Market Trends, The Rate of Economic Growth, and The Bond Market. Foreign investors must analyze the current market before entering into a mortgage loan deal.

It is important for investors to understand these factors before taking out a Foreign National Mortgage Loan. It will help them secure a better deal with the right lender and save money in the long run.

Adding to your empowerment, below are a few tips on securing the best deal.

Tips to Get the Best Foreign National Mortgage Rates

1. Look for Experienced Lenders

To get the best Foreign National Mortgage Rate, your best bet is to look for an experienced Foreign National lender who can provide you with competitive rates.

HomeAbroad specializes in providing US mortgages for foreign nationals, including expats, newcomers, and non-resident investors buying primary residences, second homes, or investment property. Get a quote today!

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2. Consider Terms and Conditions

When comparing Foreign National Mortgage Rates, be sure to consider the terms and conditions of each loan. Different lenders may offer different types of Foreign National Mortgage Rates with varying interest rates, fees, and payment options. Make sure you understand all the details before deciding which Foreign National mortgage is right for you.

3. Check your Credit Score

Another important factor in getting a Foreign National Mortgage Rate is your credit score. A higher credit score typically means a lower Foreign National Mortgage Rate.

4. Shop Around

Finally, shop around and compare Foreign National Mortgage Rates from multiple lenders. Feel free to negotiate with lenders to get the best Foreign National Mortgage Rate possible. By doing your research and taking the time to compare rates, you can save yourself a lot of money in the long run.

Also, It is important to shop for mortgage lenders and compare the interest rates offered by each one of them. It will help you pick the best deal and maximize profitability. To connect with the best mortgage lenders who provide the most competitive rates and have years of experience and happy clientele, reach out to HomeAbroad now!


Foreign National loans are an excellent option for Foreign investors who want to purchase property in the US. However, finding the right mortgage lender and understanding Foreign National Mortgage Rates is essential for a smooth transaction.
HomeAbroad specializes in providing US mortgages for foreign nationals, including expats, newcomers, and non-resident investors buying primary residences, second homes, or investment property. Get a quote today!

Frequently Asked Questions

1. Are Foreign National Mortgage Rates higher than traditional loans?

Yes, Foreign National mortgage rates are typically higher than traditional mortgage loans due to the additional risk associated with Foreign Nationals. However, Foreign National Mortgage Rates will vary depending on the lender and other factors such as creditworthiness and loan amount.

2. How can Foreign Nationals get in touch with experienced lenders?

Foreign Nationals can contact experienced Foreign National Mortgage lenders through HomeAbroad. HomeAbroad has a vast network of Foreign National Mortgage lenders and brokers who can provide Foreign Nationals with the best Foreign National Mortgage Rate. Reach out to HomeAbroad today and get in touch with them for free!
How to Find the Right Mortgage Lenders for Foreign Nationals?

3. How much is the down payment required for Foreign National loans?

The down payment requirement for Foreign National mortgage loans is typically higher than for traditional mortgages. It is usually 20-25% of the total purchase price. Foreign nationals should research and find lenders offering foreign national loans with lower down payment requirements.

About the author:
Amresh is the Founder & CEO of HomeAbroad. With over 14 years of mortgage industry experience, he specializes in foreign national mortgages and Non-QM mortgages. He is also a licensed mortgage originator (NMLS # 2549148).

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