Investment property mortgage rates explained: what your clients should know
lender’s requirements
borrower’s experience
general risk profile
credit history
The potential level of risk for the bank or mortgage lender increases if the borrower makes a smaller down payment, which increases the loan-to-value (LTV) ratio. In other words, the borrower might be more willing to walk away from the investment if it underperforms. To compensate the mortgage lender for taking more risk, investment property loans with a higher LTV ratio usually come with higher interest rates and larger loan fees. As you already know, investment property mortgage rates are...