Investment Property Loan Calculator: Payment on a Rental Mortgage
Work out the monthly payment and total interest on an investment property loan — the financing structure for a single-family or small multi-family rental, distinct from primary-residence mortgages and commercial loans.
Adjust the inputs and select Calculate for a full breakdown.
Year-by-year amortization schedule
Compare Common Scenarios
How the numbers shift across typical situations for this calculator:
| Scenario | Monthly payment | Total interest | Total of payments |
|---|---|---|---|
| $200k · 8.5% · 30-year | $1,537.83 | $353,617.71 | $553,617.71 |
| $120k · 9% · 25-year | $1,007.04 | $182,110.69 | $302,110.69 |
| $450k · 7.75% · 30-year (4-plex) | $3,223.86 | $710,587.84 | $1,160,587.84 |
| $80k · 10% · 20-year (DSCR) | $772.02 | $105,284.16 | $185,284.16 |
How This Calculator Works
Enter the loan amount (purchase price minus down payment), the APR, and the term. The calculator turns the APR into one constant monthly payment using the amortization formula and shows total interest paid across the loan. Investment property loans cost more than primary mortgages — factor the higher rate into rental cash flow projections.
The Formula
Fixed-Rate Amortization
P = loan amount, r = monthly rate (APR ÷ 12), n = number of monthly payments
Worked Example
A $200,000 investment property loan at 8.5% APR over 30 years gives a monthly payment of about $1,538. Total payments come to roughly $553,600 over 30 years — interest adds about $353,600. Against $24,000 of annual rent, that's $1,538/month of mortgage P&I against $2,000/month of rent — leaving $462/month for taxes, insurance, vacancy, maintenance, and cash flow.
Key Insight
Investment property loan cash flow has three drivers: the rent-mortgage gap, vacancy and maintenance reserves, and tax treatment. New investors routinely underestimate operating expenses — 'rent minus mortgage' looks positive but evaporates once 10% to 20% goes to vacancy, maintenance, management, taxes, and insurance. Pro forma the deal with realistic operating costs (often 30% to 50% of gross rent on residential rentals) before assuming the property cash flows.
Frequently Asked Questions
How does investment property financing differ from primary mortgage?
Higher rate (0.5 to 1.5 points above primary), higher down payment (20% to 25%+), stricter DTI underwriting, and rental income only partially counted (typically 75% of market rent). Property must be held as investment (not flipped) per most lender policies.
How much down payment is required?
Single-family investment: 20% minimum, often 25% for the best rates. Multi-family (2-4 units): 25% to 30%. Commercial (5+ units): 25% to 35% under commercial loan rules. Higher leverage available through DSCR and non-QM products at higher rates.
What is a DSCR loan?
Debt Service Coverage Ratio loan — qualifies the borrower based on the property's rental income covering debt service (typically 1.0 to 1.25x), without traditional income documentation. Higher rate than conventional (often 1 to 3 points more), faster underwriting, no personal DTI test.
Are mortgage interest payments deductible?
Yes — investment property mortgage interest is deductible against rental income on Schedule E. Unlike primary-home mortgage interest (which faces the standard-deduction hurdle for itemization), Schedule E deductions reduce rental income directly.
Can I use a primary mortgage for a rental?
Only if you actually occupy the property as a primary residence for the required period (usually 1 year minimum). Buying a rental and disguising it as primary residence is mortgage fraud — banks audit occupancy and can call the loan due.
Related Calculators
Data Sources & Benchmarks
This calculator draws on 2 independent, dated sources.
Methodology & Review
Payments use the standard fixed-rate amortization formula. The calculator assumes a fixed APR over the term. Investment property loans typically price 0.5 to 1.5 points above primary-residence mortgages, require 20% to 25%+ down, and are underwritten with rental income considered (typically 75% of market rent counts toward DTI).
Written by Ugo Candido · Last updated May 17, 2026.