Pricing on DSCR loans in 2024 commonly lived between roughly 7.5% and 9.5% for 30-year fixed programs, with the exact number depending on credit, leverage, property type, and structure. Where a file lands inside that band — and what the terms look like around the rate — is decided by a handful of specific figures. This walkthrough covers the ones that matter, then prices out a full example so the arithmetic is concrete.
Every number below is a market description, not a quote. DSCR pricing is quote-specific, and a serious conversation starts with your scenario rather than a rate someone posted on a forum.
Where DSCR Pricing Sat in 2024
DSCR loans are not backed by any government agency, so they do not price off the same scaffolding as conventional mortgages. Lenders fund them and price them for the risk the program carries, which is why even a strong DSCR file commonly prices above a comparable conventional mortgage, and why pricing moves with the broader market. When benchmark yields shifted in 2024, DSCR pricing shifted with them. If the product itself is new to you, start with how DSCR loans underwrite the property's income rather than the borrower's — the pricing tiers below only make sense on that foundation.
Inside the program, pricing is tiered by risk. The best-execution profile — 740-plus credit, 75% loan-to-value, single-family rental, purchase transaction — sat near the bottom of the band. Files with lower scores, higher leverage, or more complex collateral sat higher, and some combinations of factors pushed pricing above the band entirely. The takeaway is not the range; it is that every characteristic of the deal moves the number, which is why two investors can compare quotes and find they are not comparable at all.
The File-Level Factors That Move Your Quote
- Credit score: the single largest lever at the top; scores below the low 600s close most programs entirely.
- Leverage: pricing improves as loan-to-value falls, with meaningful breaks at 75% and again below 70%.
- Property type: single-family rentals price best; condos, 2–4 unit properties, and non-warrantable condos add cost.
- Occupancy strategy: standard leases price best; short-term-rental programs commonly price higher.
- Transaction: rate-and-term refinances price best; cash-out adds.
- Prepayment structure: choosing a shorter or no-penalty exit typically costs rate.
None of these factors work alone. A 700-score, 80% LTV, short-term-rental condo is not one adjustment away from a best-execution file; it is several, and the pricing will say so.
Leverage Limits and Down Payments
Purchases commonly go up to 80% loan-to-value for strong files, with most lenders' pricing tiers rewarding 75% or lower. That translates to down payments commonly in the 20% to 25% range. Cash-out refinances commonly cap at 70% to 75%, and low-ratio programs meant for properties below a 1.00x coverage ratio commonly require 30% down or more.
Leverage also feeds straight back into the coverage ratio that approves the loan: more debt means more debt service, and more debt service means a lower ratio. The maximum loan a property supports is usually the smaller of two numbers — the lender's leverage ceiling and the amount the rent can cover. Know which one is binding for your deal before you assume a down payment figure.
Points, Fees, and What Closing Costs Add Up To
Origination on DSCR transactions commonly runs 1 to 2 points — one point being 1% of the loan amount — reflecting the higher-touch underwriting these programs involve. Around the points sit lender fees, which commonly run in the low four figures, and third-party costs: the appraisal, commonly several hundred dollars for a 1–4 unit property, plus title work, recording, and any entity setup.
Add it up and total closing costs on a DSCR loan commonly land in the range of 2% to 4% of the loan amount. That is not small, and it belongs in your acquisition math the same way the rate does. For perspective on how these costs compare across investor finance structures, real estate investment loans lays out the wider menu.
Prepayment Structures and When They Bite
Most DSCR loans include a step-down prepayment penalty, and the two common shapes are 5-4-3-2-1 and 3-2-1. On a 5-4-3-2-1, paying the loan off in year one costs 5% of the balance, year two costs 4%, and so on until it expires. A 3-2-1 compresses the same idea into three years.
The dollars are worth seeing: on a $300,000 loan with a 5-4-3-2-1 structure, selling or refinancing in year two would cost roughly 4% — about $12,000. That is why the prepayment window and your hold horizon should match. If the plan is to sell or refinance inside three years, either price the exit into your returns or ask about shorter-penalty options at higher pricing.
Term Choices: 30-Year Fixed and the Alternatives
The 30-year fixed is the standard DSCR structure, and it is what most examples in this article assume. Some lenders offer a 40-year amortization, which lowers the monthly payment and therefore lifts the coverage ratio, at the cost of slower equity buildup. Others offer an interest-only period, commonly five to ten years, which lowers the payment further — useful for a file that needs a ratio bump — but delays principal reduction and usually carries its own pricing adjustment. Hybrid adjustable structures exist in some programs, but they are not the norm.
The practical guidance: choose the structure that fits the exit plan, not the one with the lowest first-year payment. If a 40-year or interest-only term is what makes the ratio work at all, make sure the plan accounts for what happens when the math resets.
A Worked Example: Costing Out a $300,000 Loan
A $400,000 rental purchase with 25% down produces a $300,000 loan. Assume a rate of 8.5% — the middle of the 2024 range, used for illustration only — with 1.5 points:
| Item | Cost |
|---|---|
| Origination, 1.5 points | $4,500 |
| Lender fees | $1,200 |
| Appraisal | $650 |
| Title and recording | $2,400 |
| Total closing costs | $8,750 (about 2.9% of the loan) |
The monthly payment at 8.5% over 30 years is roughly $2,307 in principal and interest. At 8.0%, the payment would be roughly $2,201 — so a half point of pricing is worth about $106 a month, or roughly $1,270 a year, on this loan size. Reserves would commonly add a requirement of three to six months of payments held after closing.
Nothing in that table is unusual for the program, and nothing in it is universal. Points, fees, and final pricing all shift with the file — which is exactly why a written scenario beats a rough estimate. Keep one comparison discipline in mind: two quotes at the same headline rate but different points are not the same offer, and putting both into a table like this one is the only honest way to tell them apart. The questions that come up most often are collected in our FAQ.
Ask for a Scenario, Not a Number
Rates and terms move with the market, and no article's numbers should be treated as a quote for your specific deal. Bring your scenario to Tesni, LLC, and our team will walk you through rate, points, reserves, and exit costs line by line so you can compare structures on total cost rather than headline rate.