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Investment Property Mortgage Rates Guide 2025: Best Rates & Strategies

Emily Chen, Construction & Commercial Loans Expert
16 min readExpert
Construction LoansCommercial MortgagesInvestment Property Financing

Investment property mortgage rates are typically 0.5-0.75% higher than primary residence rates. In 2025, savvy investors are securing rates as low as 7.25% for rental properties. This complete guide reveals the best strategies to minimize your investment property financing costs.

πŸ’‘ Investment Property Rate Alert

  • Current Average Rate: 7.5-8.25% (30-year fixed)
  • Best Available Rate: 7.25% (excellent credit, 25% down)
  • Rate Premium: 0.5-0.75% above primary residence rates
  • Down Payment Required: Minimum 20-25%

Current Investment Property Mortgage Rates (2025)

Loan TypeRate RangeDown PaymentBest For
30-Year Fixed7.25% - 8.25%20-25%Long-term hold properties
15-Year Fixed6.75% - 7.75%25%Faster equity building
5/1 ARM6.50% - 7.50%20-25%Short-term investments
Portfolio Loan7.00% - 9.00%20-30%Multiple properties

Factors Affecting Investment Property Rates

πŸ“Š Credit Score Impact

  • 740+: Best rates available
  • 720-739: +0.25% rate increase
  • 680-719: +0.50% rate increase
  • Below 680: Limited options, higher rates

πŸ’° Down Payment Impact

  • 25%+: Best rates, no PMI
  • 20-24%: Standard rates
  • 15-19%: Higher rates, possible PMI
  • Below 15%: Very limited options

Best Lenders for Investment Property Mortgages

1. Quicken Loans/Rocket Mortgage

Competitive rates for investment properties with streamlined online process.

  • β€’ Minimum 20% down payment
  • β€’ Credit score minimum: 620
  • β€’ Fast approval process

2. Wells Fargo

Strong portfolio lending options for multiple investment properties.

  • β€’ Portfolio loans available
  • β€’ Relationship pricing discounts
  • β€’ Local market expertise

3. Bank of America

Preferred rewards program can reduce investment property rates.

  • β€’ Rate discounts for existing customers
  • β€’ Jumbo loan expertise
  • β€’ Comprehensive investment services

Strategies to Get the Best Investment Property Rates

🎯 Rate Optimization Strategies

1. Maximize Your Credit Score

Aim for 740+ to qualify for the best rates. Pay down existing debt and avoid new credit inquiries.

2. Increase Your Down Payment

25% down payment typically gets you the best rates and terms. Consider 30% for even better pricing.

3. Shop Multiple Lenders

Rates can vary by 0.5% or more between lenders. Get quotes from at least 3-4 different sources.

4. Consider Portfolio Lenders

Local banks and credit unions may offer better rates and more flexible terms for investment properties.

Investment Property Loan Types Explained

Conventional Investment Property Loans

Standard loans for 1-4 unit investment properties.

  • β€’ 20-25% down payment required
  • β€’ Maximum 10 financed properties
  • β€’ Debt-to-income ratio up to 45%
  • β€’ Rental income can be counted (75% of gross)

Portfolio Loans

Kept by lenders, not sold to government agencies.

  • β€’ More flexible qualification criteria
  • β€’ No limit on number of properties
  • β€’ Faster closing times
  • β€’ May have higher rates but better terms

DSCR Loans (Debt Service Coverage Ratio)

Qualification based on property cash flow, not personal income.

  • β€’ No income verification required
  • β€’ Property must have DSCR of 1.0 or higher
  • β€’ Ideal for self-employed investors
  • β€’ Rates typically 0.25-0.50% higher

2025 Market Outlook for Investment Property Rates

πŸ“ˆ Rate Forecast

Q4 2025: Rates expected to remain in 7.25-8.25% range

2026 Outlook: Potential for slight decreases if Fed cuts rates

Best Strategy: Lock rates now if you find a good deal, as volatility continues

Frequently Asked Questions

What's the minimum down payment for investment property?

Most lenders require 20-25% down for investment properties. Some portfolio lenders may accept 15%, but expect higher rates and stricter qualification requirements.

Can I use rental income to qualify for the loan?

Yes, lenders typically count 75% of gross rental income toward your qualifying income. You'll need a signed lease agreement or rental appraisal to document expected income.

How many investment properties can I finance?

Conventional loans allow up to 10 financed properties total (including your primary residence). Portfolio lenders may have no limit but will evaluate each case individually.

Are investment property rates tax deductible?

Yes, mortgage interest on investment properties is generally tax deductible as a business expense. Consult with a tax professional for specific guidance on your situation.

Emily Chen - Construction & Commercial Loans Expert

Meet Emily

Construction & Commercial Loans Expert

8+ years Experience32+ ArticlesNMLS Licensed

Emily Chen specializes in complex financing solutions for construction projects and commercial real estate investments. With 8 years of experience in construction-to-permanent loans and DSCR financing, she has funded over $200 million in construction and investment property projects. Her expertise in navigating construction loan complexities and commercial underwriting makes her invaluable for real estate investors and builders.

EXPERTISE:

Construction LoansCommercial MortgagesInvestment Property FinancingDSCR Loans

KEY ACHIEVEMENT:

Funded $200M+ in construction projects

8+ years
Experience
32+
Articles
NMLS
Licensed
Expert
Certified
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