Non-QM rates run ~0.5–2% above conventional, driven by program, credit, and LTV. The spread has narrowed — partly because conventional investor pricing rose (LLPAs). In 2026, strong borrowers on DSCR or asset programs can see the mid-6% to low-7% range; bank statement/P&L a bit higher. And no mortgage insurance offsets part of the premium. See the calculator.
On this page
Why non-QM costs a bit more — and why less than you think
The mechanism is simple: non-QM lenders can't sell to Fannie Mae or Freddie Mac. They sell to private investors who accept the documentation flexibility in exchange for a slightly higher return — and that cost passes to you as a modest premium. Crucially, this reflects documentation risk, not credit risk — these are creditworthy borrowers.
Two forces have narrowed the gap lately: private capital has grown more competitive for high-quality non-QM loans, and Fannie/Freddie raised fees (LLPAs) on many profiles — especially investment properties — pushing conventional pricing up toward non-QM. For a DSCR investor, non-QM can now sit remarkably close to a conventional investment loan.
Illustrative 2026 rates by program
Directional ranges as of mid-2026 — not quotes, and they change daily:
| Program | Illustrative range (mid-2026) | Note |
|---|---|---|
| DSCR | ~6.25%–8.5%+ | Best tier (740+, low LTV, 1.25+ DSCR) mid-6s |
| Asset qualifier | ~6.5%–8% | Prices near conventional investor loans |
| Bank statement | ~6.75%–8.5% | Modest premium (doc complexity) |
| P&L | ~7%–8.75% | Similar to bank statement |
| 30-yr conventional (reference) | ~6.6%–6.75% | The benchmark the premium sits above |
Illustrative only, not an offer of credit. Actual rates depend on program, credit, LTV, DSCR ratio, loan amount, property, reserves, prepay terms, and market conditions, and change daily. Interest-only options typically add ~0.25%. Weaker credit (e.g. ~640) can price higher. Rates as of mid-2026.
For market context: as of early July 2026, the conventional 30-year benchmark sits near 6.6–6.75%, and the Federal Reserve has signaled a hawkish stance, with rates expected to stay above 6% near-term. Non-QM tracks that benchmark plus its spread. See our live rates page.
What sets your non-QM rate
| Factor | Effect on your rate |
|---|---|
| Program | DSCR/asset price lowest; bank statement/P&L a bit more |
| Credit score | Big lever — 740+ best; 640 prices highest |
| LTV / down payment | Lower LTV (more down) = better rate |
| DSCR ratio (investment) | 1.25+ prices best; sub-1.0 costs more |
| Prepayment terms | Accepting a prepay penalty can lower the rate |
| Structure | ARMs/IO start lower; 40-yr lowers payment |
The no-MI offset — the honest comparison
Here's what a rate-only comparison misses: non-QM has no mortgage insurance at any LTV. A conventional loan under 20% down adds PMI; an FHA loan adds MIP for the life of the loan. When you compare all-in monthly cost — not just the rate — non-QM's premium shrinks, sometimes to near-parity at lower down payments. Model it on our non-QM calculator, which adds PMI to the conventional side so you see the true gap.
How to get the best non-QM rate
Push credit toward 740+
The biggest lever. The gap between 640 and 740 pricing on non-QM is wide — often 1%+.
Lower your LTV
More down means a better rate and access to more programs. 25%+ down unlocks the best DSCR tiers.
Strengthen your DSCR (investors)
Getting a rental to 1.25+ coverage improves both rate and leverage. See DSCR.
Shop multiple non-QM investors
Non-QM pricing varies more than conventional — two lenders can differ by over 1% on the same file. As a broker we compare many to minimize the premium.
Non-QM rate FAQs
How much higher than conventional?
Typically 0.5–2%, by program, credit, and LTV. The spread has narrowed, and no MI offsets part of it.
What are rates right now?
Mid-2026, strong borrowers on DSCR/asset can see mid-6% to low-7%; bank statement/P&L higher. Illustrative — get a quote.
Why do they cost more?
Lenders can't sell to Fannie/Freddie; private investors accept the doc flexibility at a higher return, passed on as a modest premium.
Does no MI help?
Yes — vs a low-down conventional or FHA loan with PMI/MIP, the all-in cost is closer than the rate alone.
How do I get the best rate?
740+ credit, lower LTV, stronger DSCR, and shop many investors. A broker minimizes the premium.
Reviewed by the licensing team at Save Financial, a California-licensed mortgage brokerage (NMLS #377740, DRE #01875766) founded in 2009 and serving all 58 counties from offices in Newport Beach and Marina del Rey.