If you’re thinking of purchasing an investment property, you may want to know more about how an investment property mortgage differs from a regular mortgage. Investment property mortgages are similar to traditional mortgages, but are often accompanied by higher interest rates and stricter eligibility requirements to borrowers. This is because lenders often view investment property mortgages as riskier than traditional mortgages, since borrowers are less likely to default on a mortgage for their primary residence.
The 7 best investment property mortgage rates of 2020
- Quicken Loans – Best for online application
- Better Mortgage – Best for preapproval
- New American Funding – Best for loan options
- Navy Federal Credit Union – Best for service members
- PNC Bank – Best for online tools
- SoFi – Best for low rates
- Guaranteed Rate – Best for customer satisfaction
|Lender||30 Year Fixed APR||Eligibility Criteria||Key Benefits|
|Quicken Loans||3.373%||620||Flexible options and easy application|
|Better Mortgage||3.14%||620||Streamlined application and no commission fees|
|New American Funding||2.940%||620||Wide variety of mortgage types|
|Navy Federal Credit Union||3.20%||varies||Low rates and no prepayment penalties|
|PNC Bank||Varies||620||Online savings tools and resources|
|SoFi||Varies||660||Easy application and competitive pricing|
|Guaranteed Rate||Varies||580||Neighborhood data and local experts|
The 7 best investment property mortgage rates of 2020
Quicken Loans – Best for online application
Quicken Loans takes the stress out of applying for a mortgage with a quick and easy online application process. It offers a variety of different investment property mortgage options, including fixed mortgages, adjustable mortgages, FHA and VA loans. Rates with Quicken Loans start at 3.373% APR for a 30 year fixed rate mortgage. Its online application makes it easy to start an investment journey in real estate, no matter what kind of mortgage you need.
Better Mortgage – Best for preapproval
Better Mortgage prides itself on reinventing the mortgage industry to streamline the application process, eliminating unnecessary fees and extras steps so that the mortgage application process is as painless as possible. The lender features no commission, instant loan estimates and a simple, transparent application process. Borrowers can apply entirely online and can be preapproved in as little as three minutes.
New American Funding – Best for loan options
If you’re looking for options when it comes to an investment property mortgage, New American Funding won’t disappoint. This lender offers a wide variety of different types of home loans to fit your needs. These include 30-year fixed-rate mortgages, 15-year fixed-rate mortgages, VA loans, FHA loans, conventional loans, and others. This gives you the option to tailor your loan to fit your specific needs, depending on your age, income and personal history.
Navy Federal Credit Union – Best for service members
Navy Federal Credit Union is a not-for-profit credit union that serves members of the armed forces, veterans and their families, including individuals serving with the Army, Marine Corps, Navy, Air Force and Coast Guard. This lender offers 15-year conventional fixed-rate mortgages for investment properties, with a rate of 3.22% APR. The mortgage requires a 25% down payment, which may be higher than some other lenders. Investment property mortgages from Navy Federal Credit Union feature no prepayment penalties, so you can pay off your loan any time you like. And if you already have an existing investment property mortgage, you may be eligible to refinance through this lender.
PNC Bank – Best for customer service
PNC Bank offers a variety of investment property mortgages, including fixed-rate mortgages, adjustable-rate mortgages, jumbo loans, FHA loans, VA loans and specialized loans. Fixed-rate and adjustable-rate mortgages have terms between 10 and 30 years, with down payments as low as 3% and loan amounts up to $510,400. Jumbo loans have terms between 15 and 30 years along with a variety of different payment options. PNC also offers excellent customer service, with a variety of educational and savings tools customers can use to understand their finances, stick to a budget and save money over time.
SoFi – Best for low rates
While SoFi may have made a name for itself through its student loan refinancing services, this lender also offers a variety of other products, including investment property mortgages. SoFi features extremely competitive rates, along with the option to prequalify and an easy, stress-free application process. Depending on your financial situation, you may be able to qualify for a mortgage with as little as 10% down. SoFi offers 30-year, 20-year, 15-year and 10-year fixed mortgages.
Guaranteed Rate – Best for customer satisfaction
Guaranteed Rate offers a variety of different kinds of mortgages, including 30-year fixed rates mortgages, 15-year fixed rate mortgages, adjustable rate mortgages, jumbo loans, FHA loans, VA home loans and interest only mortgages. Guaranteed Rate is a good choice for an investment property mortgage if you’re looking for a lender with excellent customer satisfaction ratings. The lender claims that 96% of customers would recommend Guaranteed Rate to their friends and family. Guaranteed Rate also features real-time neighborhood data, trusted local experts, and borrowers can apply online or in person.
What is an investment property mortgage?
Investment property mortgages are mortgages that individuals take out on properties that they plan to rent rather than live in. These residences are known as investment properties. Investment property mortgages tend to have higher interest rates than traditional mortgages, and they may have stricter eligibility requirements. This is because investment properties present more of a risk to potential lenders, since property owners are more likely to stop payments on an investment property mortgage than on the mortgage for the house that they actually live in. Property owners may also have trouble paying an investment property mortgage if they struggle to find tenants to rent the house or apartment.
How should I choose the right investment property mortgage?
Finding the right investment property mortgage will depend on your financial situation and what loans you qualify for. In general, you should look for mortgages with low interest rates and few fees. If you plan on buying a multi-unit property and living in one of the units, you may also qualify for an FHA loan or a VA loan, as long as the property has a maximum of four units.
Too long, didn’t read?
Investment properties can be a great way to diversify your investment portfolio and earn rental income. However, investment property mortgages tend to have higher rates and stricter requirements than traditional mortgages. If you plan on applying for an investment property mortgage, it’s a good idea to have a sizable down payment saved up and to be as financially stable as possible.
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Last updated July 17, 2020 – Updated recommendations
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