DSCR rate & term refinance
DSCR Rate & Term Refinance: what do real estate investors need to know?
Refinance a rental out of hard money, a maturing bridge, or a high-rate note into 30-year DSCR financing. Up to 80% LTV, no tax returns, LLC vesting. Final eligibility, pricing, and terms are subject to a complete application, credit and property review, and full underwriting.
- A DSCR rate & term refinance replaces your existing loan without pulling meaningful cash out — pricing and LTV are better than cash-out.
- Common uses: exiting hard money or a bridge loan, dropping an ARM into a fixed, or removing a partner's financing.
- Standard maximum LTV runs to 80% with qualifying DSCR and credit, versus 75% on cash-out.
- Qualification is still property-based: rent versus PITIA, credit, reserves, and appraisal.
- Terms shown are illustrative program ranges, not a quote or commitment to lend.
Rate-and-term means the new loan pays off the existing lien, closing costs, and escrows — nothing more. That narrower purpose is exactly why lenders allow more leverage and price it below a cash-out.
The four situations this solves
Rehab is done and the unit is leased — swap 11% interest-only for 30-year amortized rental debt.
A 12–18 month bridge is coming due. Refinance before the balloon instead of negotiating an extension fee.
Pricing has moved since you closed and the new payment materially improves monthly cash flow.
Move from an ARM to fixed, add an interest-only period, or reset the amortization to 30 or 40 years.
Get your DSCR Scenario Summary
Complete the short pre-qualification form and we send back a full DSCR analysis: HUD Fair Market Rent, AVM value, calculated DSCR, PITIA breakdown, and the max qualifying loan amount up to 80% LTV.
- HUD FMR rent estimate for the subject property
- AVM property value + max qualifying loan
- Calculated DSCR with PITIA breakdown
- Cash-on-cash and year-one cash flow
Illustration only, generated from the information you enter. Not a loan estimate, pre-qualification, commitment to lend, or approval. Formal pricing, LTV, and terms are issued only after credit review, income/asset documentation, and full underwriting.
Current DSCR Rate & Term Refinance Rates
Rate-and-term refinances price closest to purchase pricing on the DSCR grid because no equity is being released. The live options below reflect the most recent successful pricing response; each row's rate, APR, points or credit and monthly principal-and-interest come from one Optimal Blue quote rather than being assembled from separate sources.
Most rate-and-term files here are exits from hard money, a maturing bridge note, or a higher-cost private loan. When you compare options, look at the APR and the primary lender fee alongside the rate — a slightly higher rate with a lender credit often nets out better on a short hold than buying the rate down with points.
Live pricing unavailable — no current pricing response.
Get My Live DSCR Rates
The three cards above are featured examples from the current snapshot. Enter your own property, credit tier, leverage and rent to see every eligible option for your deal.
Rate & Pricing Disclosure: This quote is an indication for the scenario entered and the pricing available at the time shown. Rates and terms are subject to change without notice and may change or may not be available at commitment or closing. This is not a rate lock, loan approval, commitment to lend or offer of credit. APR reflects applicable borrower-paid finance charges and pricing credits for this quote and may be the APR returned with the quote or our own audited calculation where verified borrower-paid finance charges outside the quoted price apply. Additional lender and third-party costs may apply and may not be included in the APR. Payment shown is principal and interest only and excludes taxes, insurance, HOA dues and other applicable costs, so your actual payment will be higher. Simply Approved Mortgages LLC is a mortgage broker, not the funding lender. Business-purpose, non-owner-occupied investment property only. Equal Housing Opportunity.
APR reflects applicable borrower-paid finance charges and pricing credits for this quote. Depending on the option, the APR shown is either the APR returned with that quote or our own audited calculation, used where verified borrower-paid finance charges outside the quoted price apply. Other lender and third-party costs may apply and may not be included in the APR.
Estimated payment is principal and interest only and does not include property taxes, insurance, HOA dues, flood insurance, escrows or other applicable costs.
Rate questions for this page
Can I roll closing costs into a DSCR rate and term refinance?
Financing reasonable closing costs and prepaid items is generally permitted within program LTV limits. Adding meaningful cash proceeds converts the file to a cash-out refinance and prices accordingly.
Does paying off a hard money loan count as rate and term?
Paying off the existing lien plus customary closing costs typically qualifies as rate and term. Seasoning and the original purpose of the lien being retired are reviewed by the lender.
Rate & term vs. cash-out
| Factor | Rate & term | Cash-out |
|---|---|---|
| Maximum LTV | Up to 80% | Up to 75% |
| Relative pricing | Lower | Higher |
| Cash to borrower | Incidental only | Unrestricted business use |
| Reserve requirement | Standard | Often one tier higher |
| Typical use | Debt replacement | Funding the next acquisition |
Rate & term: benefits and trade-offs
- Highest available refinance leverage on a DSCR file
- Better pricing than an equivalent cash-out
- Clean exit from hard money or bridge before a balloon
- No income documentation and no DTI test
- Cash back is limited to incidental amounts
- Payoff-statement prepayment penalties can erode the benefit
- A new appraisal and rent schedule are still required
- Closing costs reset — worth modeling against your hold period
Have a bridge or hard money loan maturing?
Send the payoff date and current rent. We'll model the takeout and tell you whether the timing works.
DSCR loan programs
Every DSCR variant we arrange, with the leverage and credit floor that applies to each.
Buy a 1–8 unit rental qualified on market rent or the in-place lease — up to 80% LTV, no tax returns.
Pull equity out of a rental you already own to fund the next purchase. Up to 75% LTV on the strongest tier.
A revolving line against rental equity — draw only what you need. 700 min FICO, up to 75% CLTV.
A second-position line behind your existing first mortgage on a rental — priced on combined loan-to-value.
For properties that don't fully cover PITIA. Larger down payment and a rate premium instead of a ratio test.
The formula, the rent figure lenders use, and every step from scenario review to closing.
Credit, DSCR floor, down payment, reserves, property type, and entity rules laid out in one place.
A 10-year interest-only period lowers PITIA, lifts your ratio, and frees monthly cash flow.
The honest ledger — what you gain over conventional financing and exactly what it costs.
Current rate bands by DSCR, LTV, and FICO tier — plus what actually moves your pricing.
Run rent ÷ PITIA in seconds and see which pricing tier your deal lands in.
Rate & term refinance questions
What counts as a rate-and-term refinance?
Paying off the existing lien plus closing costs and prepaid escrows, with incidental cash back generally limited to the lesser of 1% of the new loan amount or $2,000. Anything above that is treated as cash-out.
How much leverage can I get?
Rate-and-term follows purchase leverage more closely than cash-out — up to 80% LTV at the strongest tier, subject to FICO, DSCR, loan size, and property type.
Can I refinance a hard money loan into a DSCR loan?
Yes, and it is one of the most common uses. Once the rehab is complete and the property is rent-ready or leased, the DSCR loan takes out the short-term debt with 30-year financing.
Do I need a lease in place?
Not always. The appraiser's Form 1007 market rent can be used where there is no lease, though a vacant-property refinance typically requires DSCR of at least 1.00.
Will I pay a prepayment penalty on my existing loan?
That depends on your current note. We check the payoff statement early so the penalty is priced into the decision before you spend money on an appraisal.
Can I do a rate-and-term refinance to remove a partner from title?
Typically no — removing a co-borrower or partner and adjusting equity between owners is usually treated as cash-out even without net proceeds to you, since it changes the ownership structure rather than simply replacing the existing lien.
Does a rate-and-term refinance reset my seasoning clock?
It resets the ownership seasoning clock for a future cash-out refinance, since the seasoning period runs from your acquisition date and continues regardless of whether you've refinanced the loan itself in the meantime.
Can I combine two liens into one with a rate-and-term refinance?
Yes, paying off a first mortgage and a subordinate lien such as a HELOC together is a common rate-and-term use case, as long as the combined proceeds are limited to payoff, closing costs, and prepaid escrows.
Will my new DSCR ratio be recalculated on a rate-and-term refinance?
Yes. The refinance is underwritten on the current rent against the new PITIA at the new rate and term, so your ratio can improve, worsen, or stay similar depending on how the new payment compares to the old one.
Is a rate-and-term refinance faster than a cash-out refinance?
Timelines are generally similar since both require an appraisal and full underwriting, though rate-and-term files can move slightly faster because there's no cash-out seasoning analysis or use-of-proceeds documentation to review.
Can I refinance a property that currently has no tenant?
Yes, using the appraiser's market rent from Form 1007 or Form 1025, though a vacant property refinance typically needs to clear a minimum DSCR — generally 1.00 — since there's no in-place lease to support the file.
Can I do a rate-and-term refinance if I already have a prepayment penalty on the current loan?
Yes, though the existing penalty on your current note still applies and should be factored into whether refinancing now makes sense versus waiting for the penalty period to expire or step down.
Business-purpose loans only. Figures are illustrative, subject to change, and are not a quote, offer, or commitment to lend. Eligibility, terms, and availability vary by borrower, property, lender, and state.
Related programs & tools
The main program: qualify on the property's rent instead of your tax returns.
Underwrite nightly-rate revenue from trailing 12-month actuals or market projections.
Voucher-backed rent with the HAP portion treated as the conservative qualifying income.
Short-term, asset-based financing when you need to close before a refinance or sale.
Purchase plus rehab draws on a 12-month interest-only term for value-add projects.
Current rate bands across every business-purpose program we place.
What Can Change the Outcome
Rate-and-term keeps leverage tighter than cash-out and generally prices better because no proceeds leave the closing table. It is the standard takeout for bridge, hard money, and construction debt.
The decision is arithmetic: monthly savings against total closing cost plus any prepayment penalty on the existing loan. Compute the break-even in months and compare it to how long you actually intend to hold the property.
Confirm the payoff figure and prepay exposure in writing before ordering the appraisal. A penalty discovered late can erase the entire benefit of the refinance.
Reviewed by Simply Approved Mortgages · NMLS #2620881. Business-purpose investor lending only.
Refinance into permanent rental financing
Same-business-day scenario review on complete submissions.
Get Your Personalized Rate QuoteGet your personalized investor loan quote
Pick the loan type that fits your deal and complete a short, tailored pre-qualification. A licensed loan officer follows up with an initial scenario review once we have your credit authorization and supporting documents — usually the same business day. Formal pricing and terms follow underwriting.
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The form below is tailored to DSCR rental loan — only the questions your program needs.