DSCR Loan Rates Today (October 2026): Freddie Mac at 7.28%, DSCR Median Near 8.1%

What changed since our May 2026 study

We first published this study on May 17, 2026, when Freddie Mac's 30-year average was 6.36%. Five months later almost every benchmark under a DSCR quote has moved the same way, so the May ranges below are kept only as a dated reading and every "current" figure has been replaced with a saved source.

Two of those readings are records for this cycle. The 7.28% PMMS average is the highest since the week of November 22, 2023 (7.29%), and the 10-year yield of 5.31% is the highest close since May 2002 in the FRED series (our reading of the saved series). The Fed's September statement says: “The Committee decided to raise the target range for the federal funds rate by 1/4 percentage point to 3-3/4 to 4 percent.” It adds that “Inflation remains elevated.”

Our May page also had an error worth correcting in public: it quoted Freddie Mac at 6.30% for “May 2026”. That was the April 16 and April 30, 2026 reading; the May 14 reading was 6.36%.

On a $300,000, 30-year fixed loan the move from 6.36% to 7.28% raises principal and interest from about $1,869 to $2,053 a month, about $184 more (our arithmetic). A DSCR quote moves with it, and because the ratio itself is rent divided by that payment, the same rent now covers less.

Section 1: The primary-source record

1.1 What federal loan data says DSCR borrowers paid (HMDA 2024-2025)

The only complete record of rates actually paid on US rental loans is the loan-level file lenders report under the Home Mortgage Disclosure Act. HMDA has no field called DSCR, so we use the definition of our investment property mortgage rates and hard money loan rates pages: a conventional, first-lien, closed-end loan on a 1-4 unit investment property, made primarily for a business or commercial purpose, with the debt-to-income field reported as not applicable (the lender did not underwrite the borrower's income) and a term of 360 months or more. That is a proxy: it can include business-purpose loans that are not DSCR loans, and miss DSCR loans whose lender reported a DTI.

HMDA reports the note rate, not the points paid to get it, and it carries the year of the loan but not the month. Loans made in 2026 reach the public file in 2027, so these figures describe 2025, not today.

1.2 The DSCR premium, measured two ways

The question “how much more is a DSCR loan” has two honest answers, and they differ by half a point:

The first two rows are the comparison our May 2026 page made with the Freddie Mac headline, and they agree with its 70-120 bps range: the premium over the headline sat between 0.78 and 1.0 points in both years. The third row is the like-for-like one for an investor who could document income: in 2025 a DSCR-type loan cost 0.376 points more at the median than a conventional investor loan. On a $300,000 loan that is about $76 a month (6.999% against 7.375%, our arithmetic). The “DSCR costs 2-4 points more” line that many lender blogs still print is not what the federal record shows for either comparison.

What the record does not support is our May claim that the spread was “the tightest in 3+ years”. HMDA shows the premium over owner-occupied loans narrowing from 1.0 to 0.875 points between 2024 and 2025, a modest change, and securitization spreads have widened since March (section 1.4).

1.3 Velocity Financial: an SEC filer's coupons (Q2 2026)

Velocity Financial (NYSE: VEL) is a lender that files its loan coupons with the SEC every quarter. Its loans are business-purpose loans on investor 1-4 unit rentals (45.6% of its held-for-investment balance at June 30, 2026) and small commercial properties, so its coupon sits above a typical DSCR loan; it is a cost-of-credit gauge, not a DSCR rate sheet.

Our May version mixed three different Velocity figures: it called both 10.1% and 10.3% the “new-origination WAC”. The Q1 2026 release had 10.15% for the quarter's production and 10.28% as the five-quarter average; the 9.75% portfolio coupon was correct. The Q2 release, the newest, says new production was priced at 9.99%, a decline it describes as “mirroring a similar reduction in shorter term interest rates”. Those loans were made in April-June 2026, before the September rise in the benchmark.

Velocity also reported nonperforming loans of 9.6% of its held-for-investment book (loans 90 days or more past due or on nonaccrual), a reminder that the coupon on a business-purpose loan pays for real losses. On August 27, 2026 Velocity announced an agreement to buy Toorak Capital's operating platform; Toorak's products include long-term rental property loans that the release calls DSCR loans (8-K, accession 0001193125-26-369585). The deal had not closed in the filings we read.

1.4 Securitization: what bond buyers charged in 2026

Most DSCR loans are sold into non-QM securitizations, so the spread bond buyers demand flows into the rate you are quoted. Angel Oak Mortgage REIT (NYSE: AOMR) publishes each of its deals in an SEC-filed supplement:

The July deal is newer and wider: 17 bps more over Treasuries, on Treasuries that were themselves higher (our arithmetic). Angel Oak's pools mix investor, bank-statement and full-documentation loans (investor loans were 36% of the loans it held awaiting securitization at June 30, 2026), so the 6.90% coupon is a non-QM blend, not a DSCR-only rate. In Q2 2026 it bought $204 million of new non-QM loans and HELOCs at a 7.34% weighted average coupon.

The May version of this page also cited KBRA presale figures for CROSS 2026-NQM1 (pool coupon 7.15%, 23.2% DSCR-underwritten), PRKCM 2026-AFC3 (tranche coupons 5.44%, 5.63% and 5.78%) and FIDL 2026-RTL1 ($143.925 million), and KBRA's 2026 outlook projection of $75.25 billion of non-QM issuance. Those are early-2026 readings that we have not re-checked against a saved document; they are kept in the data file with that label and are not used for any current figure.

1.5 Lender-published retail ranges (May 2026 reading, not current)

The table below is what lender and aggregator pages showed in May 2026, when the Freddie Mac average was 6.36%. We did not re-read these rate sheets for this update. Treat them as the May baseline: the benchmark has since risen 0.92 points.

Reconciliation note: an advertised par rate far below the market, such as the 6.12% and 5.75% figures above, usually assumes 2-3 points of buy-down, 740+ FICO, 65% LTV, 1.25+ DSCR and a 5-year prepayment penalty. Ask any lender quoting below the market: “What is this quote with 0 points, and what is it with the broker's compensation included?”

1.6 Rate ranges by borrower tier: May 2026 reading and October 2026 indication

The May column is the tier table we published on May 17, 2026 (its best tier appeared as 6.75%-7.25% in the table and 7.00%-7.50% in the text; we show the combined range). The October column adds the 0.80-point rise in the 5-year Treasury between May 15 and October 5, 2026, since most DSCR fixed rates are priced off that part of the curve; it is our arithmetic, not a lender quote. The last two rows anchor it to data: the HMDA 2025 DSCR-type distribution moved up by the gap between today's Freddie Mac reading and its 2025 average (7.28% - 6.595% = 0.685 points).

The two methods agree: the derived best tier starts around 7.55% and the shifted HMDA lower quartile around 7.56%. That is the honest range for “DSCR loan rates today” until 2026 loan data or new lender filings arrive: roughly 7.5% for the strongest files, about 8% in the middle, and 9.5% or more for thin coverage or high leverage. Get real quotes; the table cannot see your file.

Section 2: Macro rate drivers

2.1 Benchmark rates (October 2026)

The reading: the May version of this page warned that the April 2026 inflation print (3.8% headline, 2.8% core year over year, released May 12) could push DSCR rates 20-50 bps higher. The move was larger: the Freddie Mac average rose 0.92 points and the Fed raised its target instead of cutting. Freddie Mac's survey is an owner-occupied number: its own FAQ describes the borrower profile as “good/excellent credit, 20% loans, home purchase loans on owner occupied 1-unit single-family properties”. A rental loan starts there and adds the premiums in section 1.2.

2.2 The spread to conventional: what holds and what does not

The aggregator line that “DSCR loans price 200-400 bps over conventional mortgages” is still not what the federal record shows. In 2025 HMDA data the DSCR-type median was 0.875 points above an owner-occupied 30-year loan and 0.376 points above an investor's conventional 30-year loan; in 2024 the same gaps were 1.0 and 0.5 points (our arithmetic). Against the Freddie Mac weekly average the premium was 0.78 points in 2025 and 0.90 in 2024.

What changed is the level, not the premium. In May we compared DSCR best-tier quotes of 7.00-7.50% with a Freddie Mac average we gave as 6.30% (the May 14 reading was 6.36%). With the benchmark at 7.28%, the same premium points to a median DSCR-type loan near 8.06% today (our arithmetic). Two forces pull the premium in opposite directions: wider AAA securitization spreads (+17 bps between the March and July Angel Oak deals) push it up, while the 5-year Treasury that DSCR rates are keyed to (+0.80 points since May) has risen a little less than the 30-year mortgage average (+0.92). Which one dominates will show up in lenders' fourth-quarter filings.

Practical implication: a quote of about 8% on a DSCR loan today is in line with the federal record, not a gouge; a quote of 9.5% or more on a strong file (740+, 65% LTV, 1.25+ coverage) deserves a second lender.

2.3 ARM-vs-fixed (May 2026 reading)

In May 2026 the swap curve was flat (5-year SOFR swap 3.36% against 10-year 3.645%, per Chatham Financial, not re-checked), and lender quotes put 5/6 ARMs only 0.50-1.25% below the 30-year fixed, with a typical 50-75 bps gap. We have not re-read swap rates for October. The Treasury yields we saved show a 0.25-point gap between the 5-year (5.06%) and 10-year (5.31%) on October 5, 2026 (our arithmetic), so the ARM discount is still likely to be narrow. For a hold of five years or more, compare the ARM saving with the reset risk before taking it.

Section 3: Add-on costs that determine effective rate

3.1 Origination points

• Typical range: 1.0-2.0 points (1% of loan amount each) on retail DSCR
• Negotiable on loans over $1M: down to 0.75-1.0 points (per Lima One direct disclosure)
• Best-tier borrowers sometimes secure 0-1 points
• Lower-tier borrowers may pay 2-3 points

Points-for-rate math (industry rule of thumb): 1 point is commonly priced at about 0.25% of rate reduction. Some lenders offer 0.30-0.375% per point on promotions.

Break-even analysis: 1 point for 0.25% of rate has a break-even of roughly 36-48 months. Worth it if you hold longer than that and do not plan to refinance or sell inside the prepayment-penalty window.

3.2 Lender fees (the "junk fees")

• Underwriting fee: $995-$1,995 typical
• Processing fee: $495-$995 typical
• Doc prep: $250-$500
• Wire / credit / appraisal pass-throughs: about $1,000-$2,000 combined
• Total junk fees typical: $2,500-$5,000 on a single-family DSCR loan

These do not show up in the headline rate but do show up in the APR. Always compare APRs (not rates) when shopping between lenders. HMDA does not report points or fees on business-purpose loans, so the federal medians above are note rates before these costs.

3.3 Prepayment penalty schedules

Standard DSCR market norm: 5-4-3-2-1 step-down PPP (5% in year 1, 4% in year 2, 3% year 3, 2% year 4, 1% year 5, zero thereafter).

Alternative structures:

• 3-2-1 step-down (lower rate impact, lower prepay cost)
• 5-5-5-5-5 flat (less common; higher rate discount in exchange)
• 3-3-3-3-3 flat (5 years flat 3%)

Why DSCR loans can carry 5-year penalties: DSCR loans are business-purpose, non-QM loans and are not bound by the qualified-mortgage limits that apply to consumer home loans.

PPP buy-down: Most wholesale DSCR lenders let borrowers pay at closing to shorten a 5-year PPP to 3 years or remove it. Typical cost: 0.5-1.5 points.

PPP rate benefit: Choosing a 5-year PPP instead of none typically lowers the note rate by 0.50-1.00%. With rates higher today, a borrower who expects to refinance when rates fall should price the no-penalty or 3-year option before locking.

The carve-out most borrowers don't know: Many DSCR loans allow a 20% partial prepayment per year of original balance without triggering the PPP. Confirm it in the note.

FDIC-insured-bank DSCR loans (CFBank, Quontic, NASB): NASB publishes no prepayment penalty as a differentiator. CFBank and Quontic PPP schedules are not publicly disclosed and should be obtained in writing before signing.

3.4 Yield Spread Premium (YSP): the broker conflict

Yield Spread Premium is the broker compensation paid by the lender for placing a borrower at a rate above the lender's base price. Most brokers earn 1.5-3.0% total compensation (points plus YSP), often blended.

The conflict: a borrower quoted 7.5% by a broker may be looking at a 7.0% lender price with 0.5% of YSP on top, which on a $500K loan is about $2,500 of broker pay with no visible line item.

The solution: ask for a lender-paid vs borrower-paid compensation comparison before signing the lock agreement. If the broker quote and a direct-lender quote differ by 25 bps or more, YSP is likely in the price.

3.5 Lock periods and extension costs

• 15-30 day lock: typically free
• 45-60 day lock: included or +0.125 pts
• 75-90 day lock: +0.25-0.50 pts
• Extension cost: 0.125-0.25 points per week of extension
• Float-down option: many DSCR lenders offer a 30-45 day float-down for +0.125-0.25 pts. In a market that rose 0.92 points in five months, a lock is protection; a float-down is worth pricing if you expect rates to fall before closing.

Section 4: Historical rate context

Net read: DSCR rates fell from 2024 to 2025 in the federal record (median 7.625% to 7.375%) and fell again into early 2026 with the benchmark, before the summer-autumn 2026 rise took the Freddie Mac average back above 7%. The 2021 lows are not a reference point in a market with a 5.3% 10-year Treasury.

Section 5: Outlook: what our May scenarios got wrong

In May we gave three 12-month scenarios: a base case of best-tier DSCR rates oscillating between 7.00% and 8.25% with a Fed cut in late 2026 (~50%), a hawkish case of 7.75-8.75% with no cut or a hike (~30%), and a dovish case of 6.25-7.00% (~20%). Five months in, the hawkish case is the one that happened: the Fed raised its target on September 16, 2026, and our derived best tier (7.55-8.30%) sits inside the hawkish band.

We are not publishing new probabilities. DSCR rates in the next quarter depend on three readings you can check yourself every week:

1. The 5-year and 10-year Treasury yields (FRED DGS5, DGS10): DSCR fixed rates are priced off this part of the curve.
2. Non-QM AAA securitization spreads, which issuers such as Angel Oak report in their quarterly SEC filings (+130 bps in July 2026).
3. The Freddie Mac weekly survey (published Thursdays at noon ET), the benchmark lenders and borrowers both read.

Anyone selling a precise 12-month DSCR rate forecast is selling certainty that the record does not support.

Section 6: What aggregators get wrong (7 corrections)

Error #1: “DSCR loans are 7-12%, pick your tier.” A five-point band with no scenario context. The federal record put the middle half of 2025 DSCR-type loans between 6.875% and 7.75%.

Error #2: Stale rates published as “current.” Several pages still show spring-2026 tables (including the May version of this one). The benchmark has risen 0.92 points since May 14, 2026.

Error #3: Confusing a par rate such as 6.12% with an achievable rate. That figure assumes 2-3 points of buy-down and a best-case file.

Error #4: Failing to disclose YSP. Broker compensation can be built into your rate.

Error #5: Wrong spread to conventional. The “200-400 bps over conventional” claim is not what HMDA shows: +0.875 points over an owner-occupied 30-year loan and +0.376 over an investor conventional loan at the 2025 median. Our own May “70-120 bps, tightest in 3+ years” framing was right on the size, unsupported on the trend, and rested on a stale 6.30% benchmark.

Error #6: Ignoring curve flatness. “ARM is always 100 bps cheaper” does not hold when the 5-year and 10-year yields are only 0.25 points apart.

Error #7: Treating “rate” and “APR” as the same. Points and fees can add several tenths to the APR. Compare APRs.

Section 7: How to actually get the best DSCR rate

Step 1: Optimize your FICO score above 720 if possible. Pricing breakpoints at 660, 700, 720 and 740 each move the rate.

Step 2: Right-size LTV to 75% or below. The 75% and 80% breakpoints are the most punitive.

Step 3: Engineer DSCR of 1.25 or more if cash flow permits. With payments higher at today's rates, the same rent covers less; a larger down payment or an interest-only period can restore coverage.

Step 4: Get three quotes: wholesale broker, direct lender, FDIC bank. Compare them on the same day, since the benchmark is moving weekly.

Step 5: Negotiate the points-for-rate trade explicitly. Ask for the quote at 0, 1 and 2 points and run the break-even against your hold period.

Step 6: Demand the lender-paid vs borrower-paid comparison. If a broker refuses, use another broker.

Step 7: Check the benchmark before you lock. Freddie Mac publishes Thursdays; Treasury yields move daily. Avoid locking on a multi-week high if your closing date allows a few days of room.

What a borrower can do with this

If you are pricing a rental today, start from the federal record, not from an advertised floor: a 2025 DSCR-type loan cost 7.375% at the median when the Freddie Mac average was 6.595%, and the same gap on today's 7.28% points to about 8.06%. Use that as the yardstick for any quote you receive, and use the conventional investor median (6.999% in 2025, 0.376 points below DSCR-type) to decide whether documenting your income is worth the trouble; our DSCR loan versus conventional mortgage page covers the eligibility rules. Run the property's coverage at the higher payment in the DSCR loan calculator before you apply.

FAQ

Related coverage

• Federal data: Investment property mortgage rates 2026 (HMDA) · Hard money loan rates 2026 (HMDA)
• Pillar: Best DSCR Loan Lender 2026
• Calculator: DSCR Loan Calculator (interactive)
• Comparison: Visio vs Velocity vs Kiavi DSCR
• Decision guide: DSCR Loan vs Conventional Mortgage 2026
• Refinancing: How to Refinance a DSCR Loan in 2026
• FDIC bank reviews: CFBank · Quontic Bank · NASB · 1st Security Bank · Farm Bureau Bank
• Wholesale lender reviews: Visio Lending · Kiavi · Lima One Capital · LendingOne · Velocity Financial · Constructive Loans · A&D Mortgage · Easy Street Capital

Sources: Freddie Mac Primary Mortgage Market Survey page and FAQ, read October 7, 2026 (week of October 1, 2026); FRED series MORTGAGE30US, MORTGAGE15US, DGS10, DGS5, DFEDTARL and DFEDTARU, downloaded October 7, 2026; Federal Reserve FOMC statement of September 16, 2026; FFIEC/CFPB HMDA Data Browser nationwide loan-level files for 2024 and 2025 (originated conventional first-lien loans, occupancy selected locally; method and scripts as on our investment property mortgage rates page); Velocity Financial, Inc. (CIK 1692376) 8-K of August 5, 2026 (Ex. 99.1, accession 0001193125-26-334991), 10-Q for Q2 2026 (0001193125-26-335807), 8-K of May 6, 2026 (Ex. 99, 0001193125-26-209160), 10-Q for Q1 2026 (0001193125-26-209674) and 8-K of August 27, 2026 (0001193125-26-369585); Angel Oak Mortgage REIT, Inc. (CIK 1766478) 8-K earnings supplements of May 5, 2026 (0001628280-26-030126) and August 4, 2026 (0001628280-26-052154). Lender rate ranges, presale figures and swap rates are May 2026 readings, labeled as such. Averages, gaps, shifted ranges and payments are our arithmetic. This is analysis of public documents, not investment, legal or tax advice, and not a loan offer.