Investment Property Mortgage Calculator
Investment property loans cost more at every turn, and the mechanics matter more than the headline rate. Fannie Mae's guidelines require 15% down at minimum for a single-family investment purchase (25% for two-to-four units), charge the borrower through loan-level price adjustments that add roughly half a point or more to the rate, and count only 75% of gross rent toward qualification — the haircut covers vacancy and maintenance before the lender does.
The calculator is pre-set with a typical single-family rental purchase: $400,000 with 25% down at 7.25% — the rate add-on included — against tax and landlord insurance of $7,200 a year. The monthly payment is $2,646.53, and the sections below trace the two rules that decide whether the deal clears: what the non-owner-occupied surcharge really costs, and how the 75% rent rule feeds qualification.
Below 20% of price, PMI applies.
Often 1-2% of home value yearly.
Typically 0.3-1.5% of loan.
Optional — see the payoff effect.
Total monthly payment (PITI)
$2,646.53
Principal & interest $2,046.53 + tax $400.00 + insurance $200.00.
- Loan amount
- $300,000.00
- Principal & interest
- $2,046.53
- Total interest over the life of the loan
- $436,750.38
25% down — PMI applies below 20% equity and is usually removable once you reach it.
Estimates for conventional loans; taxes and insurance vary by location and coverage. Your lender's Loan Estimate is the binding figure — use this to sanity-check it.
Starting values are set for a typical rental property scenario — change any field to match yours. Need the plain version? Mortgage Calculator.
More down, smaller loan, higher payment: the LLPA in one table
The cleanest way to see what an investment property loan costs is the same house, both borrower types, side by side. The investment buyer puts 25% down against the owner-occupant's 20%, borrows $20,000 less — and still pays more every month, because Fannie Mae's loan-level price adjustments for non-owner-occupied loans push the rate up by roughly half a point or more (the January 2026 LLPA matrix carries the exact grid).
| Owner-occupied | Investment (the preset) | |
|---|---|---|
| Down payment | 20% — $80,000 | 25% — $100,000 |
| Loan amount | $320,000 | $300,000 |
| Rate | 6.5% | 7.25% (LLPA included) |
| Principal & interest | $2,022.62 | $2,046.53 |
| Monthly all-in (with escrows) | $2,502.62 | $2,646.53 |
The 75% rule: how rent counts toward qualifying
Lenders do not count rent dollar-for-dollar. Fannie Mae's guideline multiplies gross monthly rent by 75% — the 25% haircut stands in for vacancy, management and repairs — and the net figure offsets the property's payment in your debt-to-income math. On a $2,600 rent, $1,950 counts: against the $2,046.53 principal-and-interest on the preset, the rent nearly covers the loan, which is precisely what an underwriter wants to see.
Documentation decides whether the rule applies at all. A property you already own qualifies through Schedule E history on tax returns; a property you are buying qualifies through a signed lease plus the appraiser's market-rent opinion (Form 1007 or 1025). The house-hacking variant — buying a two-to-four unit, living in one unit and renting the rest — uses the same 75% math on the other units' market rent, which is why it remains the most common first step into rental ownership.
What the mortgage math deliberately leaves out
The monthly payment clears, the rent covers it — that is where the mortgage calculator's job ends and the landlord's begins. The costs between gross rent and profit are the deal, and they are not in any loan qualification:
- Vacancy is the 25% haircut for a reason — one missed month a year is roughly 8% of gross rent, and self-managing does not make your unit immune to it.
- Maintenance and capital items run roughly 1% of property value a year averaged over time; a roof does not care what the rent roll says.
- Landlord insurance policies cost more than homeowner policies for the same house, and loss-of-rents coverage is the add-on that matters.
- Scale investors often graduate to DSCR loans, which qualify on the property's rent-to-payment ratio instead of personal income — easier at scale, pricier per dollar, and a different calculator than this one.
Frequently asked questions
- How much down payment does an investment property require?
- Conventional minimums are 15% down for a single-family investment property (with a 680+ credit score) and 25% for two-to-four units. Many lenders require 700+ below 25% down. The 20% figure people associate with rentals is a pricing sweet spot, not a rule — under it, PMI enters, and investment-property PMI is priced steeply.
- Why is the investment property mortgage rate higher?
- Fannie Mae's loan-level price adjustments add a surcharge for non-owner-occupied loans — historically over a percentage point in rate-equivalent terms at higher LTVs — which lenders pass through as a higher rate, roughly 0.5-0.75 points in practice. The preset's 7.25% against an owner-occupant's 6.5% illustrates the spread.
- How much rental income counts for mortgage qualification?
- 75% of gross monthly rent. The remaining 25% is the lender's vacancy-and-expense haircut. A $2,600 rent contributes $1,950 toward offsetting the property's payment in your debt-to-income ratio — documented by a signed lease plus the appraiser's market-rent form for a purchase, or Schedule E history for a property you already rent.
- Can I count the rent from a house I'm moving out of?
- Yes, under the departing-residence rules: 75% of the market rent (documented by a lease or appraisal) counts, minus the full housing payment on that property. This is the house-hacking pattern — converting a first home to a rental while buying the next — and it works best when the rent comfortably exceeds 75% of the old payment.
- What credit score do I need for an investment property loan?
- 620 is the conventional floor, but pricing degrades fast: most lenders want 680 with 15% down and 700+ below 25% down. The LLPA surcharge for investment property stacks on top of credit-based adjustments, so the gap between a 680 and a 760 score is wider on a rental than on a primary residence.
- Is a DSCR loan better for rental property?
- Different tool. DSCR loans qualify the property — rent divided by the payment — instead of your personal income, which suits investors whose tax returns understate capacity or who own several properties. The trade is price: rates and fees run above conventional. First-time landlords with clean personal income usually pay less with the conventional loan this calculator models.