DSCR Loan Rate Buydown for Investment Property [2026]
Points, credits, breakeven, holding-period, and exit-risk comparison
A lower note rate can cost more upfront and may not recover its cost before a sale or refinance. Compare written options using the same loan amount, lock period, product, and assumptions.
Buydown Record Comparison
| Choice | Upfront effect | Holding-period issue |
|---|---|---|
| Discount points | More cash at closing | Needs time to offset cost |
| Zero-point comparison | Baseline pricing | Useful control case |
| Lender credit | Less cash at closing | Higher payment can persist |
Include Exit and Prepayment Terms
Model the expected hold, an early exit, and a delayed exit. Include the point cost, payment difference, prepayment provision, refinance costs, sale costs, vacancy, repairs, reserves, and any balloon or maturity exposure.
Primary Sources
Frequently Asked Questions
Does one discount point always reduce the rate by the same amount?
No. One point is generally one percent of the loan amount, but the associated rate reduction depends on the specific pricing and market at that time.
How is a buydown break-even period estimated?
Compare the incremental upfront cost with the projected payment difference, then stress the result for sale, refinance, vacancy, prepayment charges, and tax treatment.
Are lender credits the same as discount points?
No. A lender credit generally reduces upfront closing cost in exchange for a higher rate, while discount points increase upfront cost for a lower rate on the compared offer.