Best Investment Property Mortgage Rates

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.

In this article

    Current mortgage rates

    According to Bankrate’s latest survey of the nation’s largest mortgage lenders, these are the current refinance average rates for a 30-year, 15-year fixed and 5/1 adjustable-rate mortgage (ARM) refinance rates among others.

    Product Interest Rate APR
    30-Year Fixed Rate3.030%3.370%
    30-Year FHA Rate3.240%3.740%
    30-Year VA Rate2.960%3.120%
    30-Year Jumbo Rate3.090%3.210%
    20-Year Fixed Rate2.980%3.270%
    15-Year Fixed Rate2.560%2.890%
    15-Year Fixed Jumbo Rate2.600%2.660%
    5/1 ARM Rate3.060%4.060%
    7/1 ARM Rate2.950%3.960%
    7/1 ARM Jumbo Rate2.910%3.930%
    10/1 ARM Rate3.040%3.910%

    Rates data as of 10/21/2020

    Best investment property mortgage rates of 2020

    Best investment property lenders of 2020

    Lender30 Year Fixed APREligibility CriteriaKey Benefits
    Rocket Mortgage3.373%620Flexible options and easy application
    Better Mortgage3.14%620Streamlined application and no commission fees
    New American Funding2.940%620Wide variety of mortgage types
    Navy Federal Credit Union3.20%variesLow rates and no prepayment penalties
    PNC BankVaries620Online savings tools and resources
    SoFiVaries660Easy application and competitive pricing
    Guaranteed RateVaries580Neighborhood data and local experts

    Best for online application – Rocket Mortgage

    Rocket Mortgage takes the stress out of applying for a mortgage with a quick and easy online application process.

    J.D. Power Rating
    5/5
    Min. Credit
    620
    Min. Down Payment
    3%
    SimpleScore
    3.4 / 5.0
    close
    SimpleScore Rocket Mortgage 3.4
    Perks 4
    Credit Impact 4
    Customer Satisfaction 5
    Product Variety 3
    Fees 1

    It offers a variety of different investment property mortgage options, including fixed mortgages, adjustable mortgages, FHA and VA loans. Rates with Rocket Mortgage 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.

    Note: The lender information (Min. Credit Score and Min Down Payment) included refers to a conventional loan. For more information on investment property mortgage loans, please visit the lender site.

    Best for preapproval – Better Mortgage Company

    Borrowers can apply entirely online and can be preapproved in as little as three minutes.

    J.D. Power Rating
    N/A
    Min. Credit
    620
    Min. Down Payment
    3%
    SimpleScore
    3.8 / 5.0
    close
    SimpleScore Better Mortgage Company 3.8
    Perks 2
    Credit Impact 5
    Customer Satisfaction N/A
    Product Variety 3
    Fees 5

    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.

    Note: The lender information (Min. Credit Score and Min Down Payment) included refers to a conventional loan. For more information on investment property mortgage loans, please visit the lender site.

    Best for loan options – New American Funding

    If you’re looking for options when it comes to an investment property mortgage, New American Funding won’t disappoint

    J.D. Power Rating
    N/A
    Min. Credit
    500
    Min. Down Payment
    3%
    SimpleScore
    4 / 5.0
    close
    SimpleScore New American Funding 4
    Perks 4
    Credit Impact 4
    Customer Satisfaction N/A
    Product Variety 5
    Fees 3

    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.

    Note: The lender information (Min. Credit Score and Min Down Payment) included refers to a conventional loan. For more information on investment property mortgage loans, please visit the lender site.

    Best for service members – Navy Federal Credit Union

    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.

    J.D. Power Rating
    5/5
    Min. Credit
    Not Specified
    Min. Down Payment
    0%
    SimpleScore
    3.4 / 5.0
    close
    SimpleScore Navy Federal Credit Union 3.4
    Perks 4
    Credit Impact 4
    Customer Satisfaction 5
    Product Variety 3
    Fees 1

    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.

    Note: The lender information (Min. Credit Score and Min Down Payment) included refers to a conventional loan. For more information on investment property mortgage loans, please visit the lender site.

    Best for customer service – PNC Bank

    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.

    J.D. Power Rating
    3/5
    Min. Credit
    620
    Min. Down Payment
    3%
    SimpleScore
    4 / 5.0
    close
    SimpleScore PNC Bank 4
    Perks 5
    Credit Impact 4
    Customer Satisfaction 3
    Product Variety 5
    Fees 3

    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.

    Note: The lender information (Min. Credit Score and Min Down Payment) included refers to a conventional loan. For more information on investment property mortgage loans, please visit the lender site.

    Best for low rates – SoFi

    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.

    J.D. Power Rating
    N/A
    Min. Credit
    660
    Min. Down Payment
    10%
    SimpleScore
    3.5 / 5.0
    close
    SimpleScore SoFi 3.5
    Perks 2
    Credit Impact 5
    Customer Satisfaction N/A
    Product Variety 3
    Fees 4

    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.

    Note: The lender information (Min. Credit Score and Min Down Payment) included refers to a conventional loan. For more information on investment property mortgage loans, please visit the lender site.

    Best for customer satisfaction – Guaranteed Rate

    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.

    J.D. Power Rating
    N/A
    Min. Credit
    620
    Min. Down Payment
    3%
    SimpleScore
    3.8 / 5.0
    close
    SimpleScore Guaranteed Rate 3.8
    Perks 3
    Credit Impact 3
    Customer Satisfaction N/A
    Product Variety 5
    Fees 4

    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.

    Note: The lender information (Min. Credit Score and Min Down Payment) included refers to a conventional loan. For more information on investment property mortgage loans, please visit the lender site.

    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.

    We welcome your feedback on this article and would love to hear about your experience with the investment property mortgages we recommend. Contact us at inquiries@thesimpledollar.com with comments or questions.

    Methodology

    SimpleScore

    We’ve created the SimpleScore to help you objectively compare products and services here at The Simple Dollar.

    Our editorial team:

    • Identifies five factors to compare across each brand
    • Determines the rating criteria for each factor
    • Calculate an average of those five factor scores to get one SimpleScore

    We break down each of these five factors and their rating criteria for our review of the best mortgage companies.

    Why do some brands have different SimpleScores on different pages?

    Some brands like Bank of America, Wells Fargo, and Chase have different SimpleScores because they offer more than one financial solution — like home loans, auto loans, personal loans and more.

    For instance, in our Bank of America Mortgage Review, we give the company a 3.8 out 5 based on our five rating factors for mortgages. In our Bank of America Auto Loans Review, we give the company a 4.4 out of 5 based on our rating factors for auto loans. By tailoring our SimpleScore to each financial solution, we’re able to give you a more accurate view of a brand’s services and how it compares to competitors’ services.

    Perks

    Mortgage lending companies that provide more perks receive a higher score from us.

    Hard/Soft credit checks

    We know that credit checks affect your score –– that’s why we favor companies that offer soft credit checks or hard credit checks when you want to see your pre-approval rates.

    Customer satisfaction

    We use the J.D. Power 2019 Mortgage Origination Satisfaction Study℠ to find out how customers rate their experience with each company. (If a company is not included in J.D. Power’s study, we skip this rating factor and average the remaining factor scores.)

    Product variety

    Mortgage lenders that offer more products for their home loans are given higher scores.

    Fees

    Fees can add up fast. Companies that don’t require as many fees for your home loan receive a higher score with us.

    Margaret Wack

    Contributing Writer

    Margaret Wack writes about personal finance, health, wellness, arts and culture, among other topics.

    Reviewed by

    • Angelica Leicht
      Angelica Leicht
      Editor

      Angelica Leicht is a writer and editor who specializes in everything mortgage-related for The Simple Dollar. Her work has spanned topics that include lending product reviews, interest rate trends, racial biases in mortgage lending and the role of fintech in lending practices, and has appeared in publications such as Interest, Bankrate, The Spruce, Houston Press and VeryWell, among others.