Do you pay a mortgage on a rental property?
Henry Morales
Published Mar 27, 2026
Getting a mortgage for a rental property isn’t much different from getting a mortgage for a primary residence. In most cases, you’ll use a Fannie Mae or Freddie Mac loan for an investment property, and it will be either a fixed-rate loan or an adjustable-rate mortgage.
How much can I afford to borrow for an investment property?
In most cases, it’s possible to borrow up to 80% of the home’s equity value to use towards the purchase of a second home. Using equity to finance a real estate investment has its pros and cons, depending on the type of loan you choose. A longer loan term could mean paying more in interest for the primary residence.
What’s the interest rate on a rental property?
However, as a general rule interest rates on a mortgage for a first home or primary residence will be considerable more favorable to the borrower than on a rental property. Currently, interest on fixed rate mortgages for first time homebuyers runs from 3.41% – 4.27% depending on the lender and the extended terms of the loan.
Is it better to get a mortgage for a rental property?
Interest rates, by their very nature, vary according to the market and the individual lender. However, as a general rule interest rates on a mortgage for a first home or primary residence will be considerable more favorable to the borrower than on a rental property.
How much should I charge per month to rent a house?
Many landlords use the 1% rule to estimate rental value — which suggests charging 1% of the home’s value for rent. For example, a home valued at $220,000 would rent for $2,200 per month. However, there are many factors to consider when setting a rental price, including: Local rent control laws.
How to find the best investment property mortgage rates?
NerdWallet’s mortgage rate tool can help you find competitive investment property mortgage rates. In the “Refine results” section, enter a few details about the loan you’re looking for and select “Investment property” from the “Home purpose” drop-down menu. You’ll get a personalized rate quote in minutes, without providing any personal information.
