DSCR Loan Rates 2026
Current Rates for Investment Property Investors
DSCR loan rates in May 2026 range from 6.50% to 9.00% depending on the debt service coverage ratio, loan-to-value, property type, and borrower credit score. DSCR loan volume has surged 35% year over year as self-employed investors and those with complex income turn to income-based underwriting. Rates have compressed from 2023 peaks as more non-QM lenders enter the space with competitive programs.
Current Rate Table
Rates shown are indicative ranges based on current market conditions. Your actual rate will depend on your specific property, leverage, and borrower profile. Contact Commercial Lending Solutions for a precise quote.
| Leverage Tier | Rate Range | Notes |
|---|---|---|
| DSCR 1.25x+, 65% LTV | 6.50% to 7.50% | Best rate tier, strong income coverage |
| DSCR 1.10x to 1.25x, 70% LTV | 7.50% to 8.25% | Standard mid-range DSCR program |
| DSCR 1.0x (breakeven), 75% LTV | 8.25% to 9.00% | Higher rate for lower coverage ratio |
| No-DSCR (asset depletion / bank statements) | 8.50% to 9.50% | Highest rates, most flexible income docs |
Rates are illustrative ranges as of May 2026 and subject to change. All loan programs subject to underwriting approval. Not a commitment to lend.
What Drives DSCR Loan Rates
Understanding these factors helps you position your deal for the best available rate.
DSCR Ratio
The coverage ratio is the primary underwriting criterion. A DSCR of 1.25x or higher unlocks the best rates. Every 0.05x drop in DSCR below 1.25x typically adds 25 to 50 basis points to the rate.
Loan-to-Value Ratio
Lower leverage means lower rate. Moving from 75% to 65% LTV can reduce your rate by 50 to 100 basis points. Most lenders cap DSCR loans at 80% LTV.
Credit Score
Unlike conventional loans, DSCR lenders still look at borrower credit. A 740+ score unlocks the best pricing. Scores below 680 typically add 75 to 150 bps to the rate.
Property Type
Single-family rentals and small multifamily (2 to 4 units) get the tightest rates. Short-term rentals (Airbnb, VRBO) are accepted by many lenders but add a risk premium of 25 to 50 bps.
Loan Amount
DSCR loans above $1.5M move into jumbo territory and can see slightly higher rates. Loans under $150K may also carry rate premiums due to fixed origination costs.
Treasury Benchmarks
DSCR rates are priced as a spread over 5, 7, or 10-year US Treasury yields. When Treasuries rise, DSCR rates rise proportionally. Rate locks at application protect against this risk.
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How DSCR Loan Compare to Alternatives
Choosing the right loan structure can mean a 100 to 300 basis point difference in your cost of capital. Here is how current rates compare across loan types.
| Loan Type | Current Rate Range | When to Use vs DSCR Loan |
|---|---|---|
| Conventional Investment Loan | 7.00% to 8.50% | Requires W-2 income, tax returns, DTI calculation. DSCR skips all of that. |
| Bridge Loans | 7.50% to 11.50% | Floating rate, for transitional properties. DSCR requires stabilized rental income. |
| Hard Money Loans | 9.00% to 13.00% | Short-term, asset-based. DSCR is a permanent 30-year solution. |
| Agency Multifamily | 5.75% to 6.75% | Lowest rates but requires 5+ units, full operating statements, and DSCR 1.25x+ on the GSA guidelines. |
DSCR Loan Rates 2026: Frequently Asked Questions
What are current DSCR loan rates?
DSCR loan rates in May 2026 range from 6.50% to 9.00% for investment properties. The rate depends on your DSCR ratio, LTV, credit score, and property type. A strong deal with DSCR above 1.25x and 65% LTV can qualify for rates starting around 6.50%. Lower coverage ratios and higher leverage push rates toward 9.00%.
What DSCR ratio gets the best rate?
A DSCR of 1.25x or higher qualifies for the best rate tier from most lenders, typically 6.50% to 7.50%. Some lenders offer programs down to 1.0x (breakeven) but at higher rates of 8.25% to 9.00%. No-DSCR programs for strong asset profiles exist at 8.50% to 9.50%.
Are DSCR loan rates fixed or adjustable?
Most DSCR loans are structured as fixed-rate loans with a 5, 7, or 10-year fixed period followed by a balloon payment or rate adjustment. Fully fixed 30-year DSCR loans are available from select lenders. The most common structure is a 30-year amortization with a 5 or 7-year fixed rate and prepayment penalty.
Do DSCR loans have prepayment penalties?
Yes. Most DSCR loans carry step-down prepayment penalties (typically 5-4-3-2-1 for a 5-year fixed) or yield maintenance provisions. The penalty period matches the fixed-rate term. Lenders offering the lowest rates typically require the longest prepayment protection.
Can I use DSCR financing for short-term rentals?
Yes. Many DSCR lenders in May 2026 accept short-term rental income verified through Airbnb or VRBO platform statements, property management reports, or market rent surveys. STR income may be calculated at 70% to 80% of gross revenue for qualifying purposes. Rates are typically 25 to 50 basis points higher than for long-term rentals.
Trevor Damyan is a commercial mortgage broker with $1B+ in loans closed and direct relationships with life insurance companies, CMBS desks, debt funds, and non-QM lenders. Rate data is compiled from active lender conversations and closed transaction experience.
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