refi rate on rentals - horrible?

Question

I've been thinking about refi my rental properties but I'm getting pretty bad rates. I've been quoted 4% or 3.875 for 30 year fixed for rental properties with less than 70% LTV and loan balance of mid 150K. Is that the going rate now? For primary, I'm getting close to 3%!

Dylan Vargas · Answer

@Kevin L. Welcome! These are great rates. I refinanced a 5 plex in California and am paying %6.5. Two months ago. Everyone says there are much lower rates but could not find a local or any other bank or credit union give a lower rate when it came right down to it.

Jacob Sampson · Answer

Its funny how everything is perspective. The idea that 4% or below is considered a bad rate. I think that is a great rate. You will always pay more on an investment property than for your primary mortgage because the bank is accepting more risk on the investment than they are on your personal home.

What is your reason for wanting to refi? To pull cash out or just take advantage of lower rates?

What is your reason for wanting to refi?  To pull cash out or just take advantage of lower rates?

Michael Noto · Answer

Non-owner occupied rates are typically a 1/2 to 3/4 of a point higher than owner-occupied rates in my experience so I don't think what you are experiencing here is that abnormal.

Jacob Sampson · Answer

I think I am in the 4.25ish on a 15 year note that adjusts every 5 years.  You may think about just making extra payments.  That will get you the benefit of the lower interest rate without the transaction costs.

Kevin L. · Answer

take advantage of the low rate. i agree everything is relative. my first property carried a 6.8% interest rate! I understand that investment properties will always have a higher rate but didn't expect the gap to be this wide as the gap between the two have always been 0.5% in the past for me. With so many investors out there buying properties i was just wondering what rates others are getting and whether or not they're going through the bank route.

refi rate on rentals - horrible?

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