DSCR Loan Rates California 2025: Current Rates & Factors
Complete California DSCR Loan Guide
Explore our comprehensive guide covering all California markets, requirements, FAQs, and neighborhood analyses for LA, San Diego, San Francisco, Orange County, and Sacramento.
View Complete CA GuideDSCR loan rates in California currently start as low as 5.99%, influenced by factors like credit score, down payment, property type, and market conditions. This comprehensive guide breaks down current rates, what affects your pricing, and strategies to secure the best possible rate for your investment property in today's market.
Current Market Snapshot
Best Rate (760+ credit)
Average Rate
620 Credit Score
DSCR Loan Rates by Credit Score & LTV
| Credit Score | 75% LTV | 70% LTV | 65% LTV | Rate Adjustment |
|---|---|---|---|---|
| 760+ | 5.99% | 5.75% | 5.50% | Best Pricing |
| 740-759 | 6.25% | 5.99% | 5.75% | +0.25% |
| 720-739 | 6.50% | 6.25% | 5.99% | +0.50% |
| 700-719 | 8.00% | 7.75% | 7.50% | +0.75% |
| 680-699 | 8.50% | 8.25% | 8.00% | +1.25% |
| 660-679 | 9.00% | 8.75% | 8.50% | +1.75% |
| 620-659 | 9.75% | 9.50% | 9.25% | +2.50% |
*Rates as of January 2025. Subject to change based on market conditions. Additional adjustments may apply.
7 Strategies to Get the Best DSCR Rate
Improve Your Credit Score
Save 0.25-0.75%Even 20 points can save 0.25%. Pay down credit cards below 30% utilization.
Increase Down Payment
Save 0.25-0.50%Put 30% down instead of 25% for better pricing tier.
Target High DSCR Properties
Save 0.25-0.50%Properties with 1.25+ DSCR qualify for best rates.
Accept Prepayment Penalty
Save 0.25-0.50%3-5 year prepay reduces rate if holding long-term.
Shop Multiple Lenders
Save 0.25-1.00%Rates vary 0.5-1% between lenders for same scenario.
Time the Market
Save 0.25-0.50%Lock when rates dip. Watch Fed announcements.
Bundle Properties
Save 0.25-0.375%Portfolio deals with 5+ properties get better pricing.
Common Questions About DSCR Loan Rates
How do DSCR rates compare to conventional loans?
DSCR rates are typically 0.5-1.5% higher than conventional investment property loans. However, DSCR loans don't require tax returns or employment verification, making them accessible to self-employed investors and those with complex income situations.
Can I lock my DSCR rate?
Yes, most DSCR lenders offer 30-45 day rate locks, with some extending to 60 days. Longer locks may cost 0.125-0.25% in additional fees. Lock your rate once you're under contract and have completed the property inspection.
Do DSCR rates vary by California region?
The rates themselves don't vary by region, but property location affects the DSCR calculation. High-rent areas like San Francisco or Los Angeles may qualify for better rates due to stronger DSCR ratios, while rural properties might face slightly higher rates due to limited lender options.
Should I pay points to lower my rate?
It depends on your hold period. One point (1% of loan amount) typically reduces your rate by 0.25%. If holding 5+ years, paying points often makes sense. For shorter holds or if you plan to refinance when rates drop, skip the points.
When will DSCR rates go down?
DSCR rates follow the 10-year Treasury yield plus a spread of 2.75-3.25%. Most analysts expect rates to decrease 0.5-1% by mid-2025 as the Fed cuts rates. However, timing the market is difficult—focus on cash flow rather than perfect timing.
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