This page does not list investment-property rates because the survey sources available to us publish averages only for owner-occupied loans. The Freddie Mac Primary Mortgage Market Survey (PMMS) put the 30-year fixed at 7.40% and the 15-year fixed at 6.73% for the week of October 8, 2026, for good-to-excellent credit borrowers with 20% down buying an owner-occupied one-unit home. Investment-property loans are priced separately by each lender, so rates and down payment requirements depend on your credit score, down payment and property type.
Investment Property vs Primary Residence
Factor
Primary Residence
Investment Property
Minimum down payment
3-5%
15-25%
PMI available
Yes
Rarely
Cash-out refinance LTV
Up to 80%
Up to 75%
Down Payment Requirements by Property Type
Property Type
Minimum Down
Best Rate Down
Notes
Single-family rental
15%
25%+
Most common investment
2-unit (duplex)
15-20%
25%+
Can house hack with 5% down if owner-occupied
3-4 unit
20-25%
25%+
Still residential financing
5+ units
25-30%
35%+
Commercial financing required
Short-term rental (Airbnb)
20-25%
30%+
Higher risk = higher requirements
Monthly Payment Examples
$300,000 Investment Property Loan at 7.40% (illustration)
7.40% is the Freddie Mac PMMS 30-year average for owner-occupied loans, week of October 8, 2026, used here only as a placeholder. An investment-property quote will differ.
Down Payment
Loan Amount
Monthly P&I
Annual Payment
15%
$255,000
$1,766
$21,187
20%
$240,000
$1,662
$19,941
25%
$225,000
$1,558
$18,694
Plus: Property taxes, insurance, maintenance (plan for ~$500-$800/month additional)
How Lenders Calculate Rental Income
Lenders use 75% of gross rental income to account for vacancies and expenses:
Monthly Rent
Lender Credit (75%)
Annual Income Credit
$1,500
$1,125
$13,500
$2,000
$1,500
$18,000
$2,500
$1,875
$22,500
$3,000
$2,250
$27,000
Documentation Options
Method
What’s Needed
Best For
Existing lease
Signed lease agreement
Currently rented properties
Appraisal rent estimate
Comparable rent analysis
New purchases
Historical Schedule E
2 years tax returns
Existing landlords
Investment Property Qualification Requirements
Requirement
Typical Standard
Credit score
620+ (700+ for best rates)
Down payment
15-25%
Debt-to-income ratio
Below 45% (including rental income offset)
Cash reserves
6 months PITI for each investment property
Property limit
Up to 10 financed properties (Fannie Mae)
Experience
Not required, but may help with portfolio lenders
Cash Reserve Requirements
Number of Properties
Reserves Required
1-4 properties
6 months PITI each
5-6 properties
8 months PITI each
7-10 properties
10 months PITI each
Example: 3 investment properties with $2,000/month PITI each = $36,000 in reserves required
Investment Property Loan Types
Conventional (Fannie Mae/Freddie Mac)
Feature
Details
Best rates
Lowest for qualified borrowers
Property limit
Up to 10 properties
Documentation
Full income/asset verification
Down payment
15-25%
DSCR Loans (Debt Service Coverage Ratio)
Feature
Details
Qualification basis
Rental income, not personal income
DSCR requirement
1.0-1.25 (rent covers 100-125% of payment)
Credit score
660+ typically
Down payment
20-25%
Best for
Self-employed, multiple property investors
Portfolio/Bank Loans
Feature
Details
Flexibility
More lenient requirements
Rate
Higher than conventional
Down payment
20-30%
Best for
Investors with 10+ properties
Hard Money/Bridge Loans
Feature
Details
Approval speed
Days, not weeks
Rate
Much higher than conventional
Term
6-24 months
Best for
Fix-and-flip, quick purchases
Investment Property Analysis
Cash Flow Calculation
Income/Expense
Example
Monthly rent
$2,500
Less: Mortgage (P&I, $240,000 at 7.40%)
-$1,662
Less: Property taxes
-$300
Less: Insurance
-$150
Less: Vacancy (8%)
-$200
Less: Maintenance (10%)
-$250
Less: Property management (10%)
-$250
Net cash flow
-$312
Many properties are cash flow negative at current rates but build equity and may appreciate.
Key Metrics
Metric
Formula
Target
Cap rate
(NOI / Purchase Price) × 100
5-8%+
Cash-on-cash return
(Annual Cash Flow / Cash Invested) × 100
8-12%+
DSCR
Gross Rent / PITI
1.25+
Gross rent multiplier
Purchase Price / Annual Rent
<12
How to Get Better Investment Property Rates
Strategy
Effect
Larger down payment
Can lower the rate
Higher credit score
Can lower the rate
Single-family vs multi-family
Lenders may price them differently
Compare 5+ lenders
Quotes vary by lender
Buy discount points
Pay upfront to lower the rate
DSCR loan with strong property
May beat conventional for some investors
Tax Benefits of Investment Property
Deduction
Details
Mortgage interest
Fully deductible on Schedule E
Property taxes
Fully deductible (not subject to the SALT limit)
Depreciation
27.5 years for residential property
Repairs and maintenance
Deductible in year incurred
Property management
Fully deductible
Travel expenses
Mileage and travel to manage property
Insurance
Fully deductible
Professional services
Accounting, legal fees
Depreciation Example
Purchase Price
Land Value (20%)
Building Value
Annual Depreciation
$300,000
$60,000
$240,000
$8,727
$400,000
$80,000
$320,000
$11,636
$500,000
$100,000
$400,000
$14,545
Depreciation reduces taxable income but is recaptured (25% rate) when you sell.
Investment property loans are priced separately from primary-residence loans, and lenders typically require 15-25% down. While current rates make cash flow challenging, rental properties still build long-term wealth through equity buildup, appreciation, and tax benefits. Focus on strong properties in good rental markets, maintain substantial reserves, and compare multiple lenders to find the best rate for your situation.
WealthVieu researches and writes data-driven personal finance guides using primary sources including the IRS, Bureau of Labor Statistics, Federal Reserve, and Census Bureau.
The content on Wealthvieu is for informational purposes only and should not be considered financial, tax, or investment advice. Consult a qualified professional before making financial decisions. Full disclaimer · Editorial policy
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