Investment Property Mortgage Rates | September 2025

How much higher are current investment property interest rates?

Investment property mortgage rates are usually 0.5% to 1% higher than primary mortgage rates. In today’s market, borrowers often face rates of 7.5% or higher for an investment property, although exact rates depend on factors such as credit, down payment, property type, and lender.

Lenders charge higher investment property interest rates because rental loans carry greater risk. Even so, real estate remains a solid long-term investment, and comparing lenders can help you secure the most competitive interest rates on investment property.

In this article (Skip to...)

• Current interest rates
• Investment property rates
• What affects rates?
• How to get a lower rate
• Investment property loans
• FAQ

Current investment property mortgage rates for September 17, 2025

Investment property mortgage rates today are typically 0.5% to 1% higher than those for primary residences. At today’s average rate of % (% APR) for a primary residence, buyers can expect interest rates to start around % to % (% - % APR) for a single-unit investment property.

Our partner network offers fixed mortgage rates and annual percentage rates (APRs), which may not accurately reflect current market rates. Click here for a personalized rate quote. See our rate assumptions here.

Note that today’s average investment property interest rates are based on a prime borrower profile with a credit score of 740 and a 40% down payment. If you have lower credit or a smaller down payment, you’ll likely face higher investment mortgage rates. For this reason, use advertised averages only as a benchmark. Comparing quotes from several lenders will help you find the most competitive rental property mortgage rates available.

What are investment property mortgage rates?

Investment property mortgage rates are the interest rates charged on loans used to buy or refinance real estate that you don’t plan to live in as your primary residence. These loans typically finance rental homes, vacation properties, or multi-unit buildings such as duplexes, triplexes, and small apartment complexes.

Borrowers use these properties to generate rental income or benefit from long-term appreciation. Because lenders view non-owner-occupied mortgages as riskier, they charge higher rates. The chance of default and uncertainty around rental income make interest rates for investment properties higher than those for primary homes.

How much higher are investment property mortgage rates?

Mortgage rates for investment property are usually 0.5% to 1% higher than those for primary residences. The exact difference depends on the property type, your credit score and down payment, and broader market conditions.

For example, today’s live 30-year fixed rate as of September 17, 2025 is % (% APR), so the investment property mortgage rate would be around % to % (% - % APR).

Lenders charge higher interest rates on investment property because these loans carry more risk. If tenants fail to pay rent or the property sits vacant, borrowers may prioritize their primary mortgage, making defaults more likely. To cover that risk, lenders raise rates and impose stricter qualification standards.

How lenders set investment property interest rates

Behind the scenes, the rate you pay isn’t totally up to your mortgage lender. Banks frequently adjust their investment property mortgage rates in accordance with guidelines set by Fannie Mae and Freddie Mac. Because investment properties are riskier, these loans carry surcharges that lenders pass on to borrowers.

*Rates shown here are an example set meant for comparison only. Your own rates will vary. 

For example, a borrower making a 25% down payment may face lender fees ranging from 2% to 5% of the loan amount. Many prefer choosing a higher interest rate over paying fees upfront, which can increase their cost by 0.50% to 0.75%. Duplexes often carry an additional 1% fee or a rate hike of 0.125% to 0.25%.

According to loan expert Jon Meyer, putting at least 25% down and maintaining an LTV of 75% or less is the best way to secure competitive rates.

Other factors that impact investment property mortgage rates

While the market, Fannie Mae, and Freddie Mac establish the framework, other factors also influence investment property rates.

• Credit report: A higher credit score can secure better investment mortgage rates. The minimum credit score for rental properties is often higher than that required for a primary residence or for first-time homebuyers.
• Down payment requirements: A larger down payment (15%–25%) typically results in lower interest rates for non-owner-occupied mortgages.
• Loan-to-value ratio (LTV): The less you borrow relative to the property’s value, the more favorable your rate: a lower LTV signals less risk to lenders.
• Debt-to-income ratio (DTI): A Lower DTI signals stability and can qualify you for lower rates during the underwriting process.
• Cash reserves: Lenders often want several months of reserves to cover potential vacancies.
• Experience as a landlord: Proven property management improves approval odds and may lead to better investment home loan rates.
• Number of mortgaged properties: Conventional guidelines limit how many mortgages you can hold at once.

Your choice of loan also matters. Fixed-rate mortgages offer predictable payments, whereas adjustable-rate mortgages (ARMs) typically start at a lower rate but may increase later. Consider both during the loan application to find the best fit for your investment goals.

How to get the lowest investment property mortgage rates

It’s hard to escape high interest rates for investment properties. But there are ways to make sure you get the best deal possible.

• Make a bigger down payment: A larger down payment can reduce investment property mortgage rates, especially if you put down at least 20%, which can lower overall costs.
• Improve your credit score: Higher credit scores lead to better investment mortgage rates, lowering monthly payments, and increasing cash flow from rental properties.
• Reduce your existing debt: Lowering your debt-to-income ratio helps show lenders that you can manage monthly mortgage payments. Pay down credit cards and other debt to improve your chances of getting a low interest rate on an investment property.
• Shop around: Compare offers from different lenders, including credit unions, to find the best investment property interest rates and potentially save thousands over the life of the loan.
• Negotiate mortgage interest rates: Remember, investment home loan rates aren’t fixed. Use quotes from various lenders to negotiate lower rates and better terms.

How to get an investment property mortgage loan

Securing a loan with low rental property interest rates can be easier than you think. Follow this step-by-step guide to understand the qualifying process and how current mortgage rates for investment property may affect your borrowing costs.

1. Determine your investment goals. Understand what you want from your investment property. Are you looking for a long-term rental, a fix-and-flip, or something else?
2. Check your credit score. Lenders will look closely at your credit score. Make sure it’s in good shape, and if needed, take some time to improve it. The better your credit, the more favorable your loan terms will be.
3. Assess your financial situation. You’ll likely need a higher down payment for an investment property, often around 20–25%. Ensure you have the funds and ability to meet your monthly mortgage payments.
4. Shop around for lenders. Speak with multiple lenders to understand the types of loan programs available. Explain your investment plans and ask for their best rates and terms. Don’t hesitate to negotiate.
5. Get pre-approved. A pre-approval letter gives you credibility as a buyer and helps you understand how much you can borrow. It will make the process smoother once you find the right property.
6. Find the property. Work with a real estate agent experienced in investment properties. They can guide you to suitable options that align with your investment goals. Once you find the right property, make an offer and formally apply for the mortgage. Provide all required documents promptly, and stay in close communication with your lender.

Remember, investing in property is both an exciting and serious financial decision. Stay diligent, do your homework, and that investment property will soon be yours!

Types of investment property mortgage loans

When buying a rental property, you’ll have access to many of the same financing options as you would for a primary residence or a second home mortgage loan. However, investors have several alternative lending options to consider. Each lender will provide different investment property mortgage rates, so compare various offers to get the best deal available.

• Conventional loans: A conforming loan for investment properties requires a minimum down payment of 15%, with 20% recommended to avoid mortgage insurance and get better terms.
• Government-backed loans: FHA, USDA, and VA loans are available for 2-4 unit multifamily properties if you live in one. Down payments start at 3.5% (FHA) and 0% (VA).
• Portfolio loans: Portfolio lenders set their own terms, offering flexibility on down payments and property limits, but usually at higher interest rates than traditional loans.
• Non-warrantable condo loans: For condos that don’t meet conventional standards, these loans help finance the property but typically have higher interest rates and stricter qualification requirements.
• Hard-money loans: Private lenders offer short-term loans with high interest rates and fees, ideal for quick financing on real estate investments.
• Commercial loans: Designed for property purchases with more than four units or based on rental income alone, these loans are expensive and complex to arrange.
• DSCR loans: These loans assess your debt service coverage ratio (DSCR) to ensure rental income can cover the property’s debt, with a ratio of 1 or higher preferred.
• Home equity financing: Use a HELOC, home equity loan, or cash-out refinance to leverage home equity for purchasing investment properties or covering expenses.

Pros and cons of investment property loans

When comparing investment property mortgage rates vs primary residence loans, investors face unique advantages and drawbacks.

Investment property pros

• You can generate rental income to cover mortgage payments while building wealth through property appreciation.
• Investors often have access to higher loan limits, including jumbo loans that can exceed $1 million.
• These loans don’t require you to live in the property, giving investors more flexibility.

Investment property cons

• Rental property mortgage rates are higher than those for primary residences, so you’ll need more rental income to offset larger payments.
• Lenders typically require a larger down payment, which can make financing more difficult to secure.
• Stricter qualification standards apply, often including higher credit scores and lower debt-to-income (DTI) ratios.

Investment property loans vs. conventional loans

Investment property mortgage loans generally have higher interest rates compared to conventional loans for primary residences, reflecting the increased risk for lenders. Investors also encounter stricter requirements, such as larger down payments and higher credit score standards. Conventional loans typically offer lower rates, fewer fees, and more flexible terms, making them the preferred choice for first-time buyers and individuals pursuing homeownership.

FAQs about investment property mortgage rates

What are today’s rental property loan rates?

Mortgage rates for investment properties are typically higher than those for primary residences because lenders view them as higher risk.

Still, rental properties are usually a sound investment in the long run, and a slightly higher rate might not matter much when compared to the returns you’ll see on the property. Plus, every applicant is different.

The best way to secure your current investment property mortgage rate is to obtain quotes from multiple lenders and have them compete. Rates change frequently, so contacting lenders online is the quickest way to get multiple rates for comparison.