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The loan does not change NOI. It changes what is left after you pay the lender. Rate, down payment, and amortization can flip a property from a monthly surplus to a monthly gap without touching rent or taxes.
By RentalAnalytics Editorial Team · Published September 14, 2026
As debt service, the full principal and interest payment, subtracted after operating expenses. NOI is rent after vacancy, minus taxes, insurance, maintenance, management, and other operating costs. Cash flow is what remains after the loan payment. Depreciation is not a cash line. Principal is cash out even though it is not an operating expense.
That split is why two buyers can disagree about the same address. They can share one NOI and still have opposite cash flow if one has a smaller loan or a cheaper rate. The cash-flow walkthrough with vacancy and expense buckets is in how to calculate rental cash flow. This article is about the loan terms that move the payment.
Interest rate, loan balance, and amortization. Points and lender fees change cash invested at closing, so they show up in cash-on-cash even when the monthly payment barely moves. Prepayment penalties do not hit year-one cash flow unless you sell or refinance in that year.
Freddie Mac's Primary Mortgage Market Survey put the 30-year fixed average at 6.76% as of September 10, 2026, up from 6.71% the week before and 6.35% a year earlier.[1] Freddie Mac describes that print as an average of conventional, single-family, conforming purchase applications. It is a useful public benchmark. It is not the rate on an investor DSCR product, a portfolio loan, or a stated-income quote.
Amortization changes the same balance into a different payment. A 15-year schedule raises the monthly outlay and pays the loan down faster. A 30-year schedule lowers the monthly outlay and leaves more principal outstanding. Interest-only periods, where they exist, defer principal and raise later resets. Model the payment you will actually write each month, not the teaser that expires.
They can produce the same payment math and still use different approval tests. A conventional rental loan usually looks at your personal income and your other debts. The Consumer Financial Protection Bureau defines a debt-to-income ratio as "all your monthly debt payments divided by your gross monthly income" and notes that lenders use it as one underwriting factor.[2]
A DSCR loan looks at the property. Debt service coverage is NOI divided by annual debt service. The ratio, the common 1.0 to 1.25 conversation, and what belongs in NOI are in the DSCR explainer. Do not import a conventional DTI rule into a DSCR term sheet, or the reverse. Ask the lender which test they will run on your file.
Neither path invents rent. If the lender uses in-place leases, start there. If the lender uses a market-rent estimate, ask whether that estimate is a statistical median or a voucher schedule. On this site, estimated market rent is HUD 50th-percentile plus Census ACS, and HUD Fair Market Rent stays the labeled 40th / voucher number.[3][4]
It usually makes monthly cash flow larger, because the payment shrinks. It does not automatically make cash-on-cash larger, because the denominator grows by the extra down payment and any extra closing costs. You can buy a more comfortable monthly number and a weaker percentage on cash invested in the same closing.
Work a rate gap with public figures, not with an invented investor-loan coupon. On a $300,000 loan, the difference between a 6.35% payment and a 6.76% payment is a few tens of dollars a month, not a new rent roll. On a $240,000 loan versus a $300,000 loan at the same 6.76% 30-year rate, the balance change is the larger swing. Run those two cases in a calculator instead of guessing which lever matters more on your price point.
Vacancy still sits in front of the loan. The Census Bureau reported a 7.3% national rental vacancy rate in the second quarter of 2026.[5] A payment that looks covered on scheduled rent can fail after a 7% vacancy line. Stress the occupancy assumption before you stretch the loan-to-value.
The cash flow analyzer is built for that fourth step. It is not a lender decisioning engine and it does not claim a quoted rate is available. This article is education on how loans hit a rental P&L. It is not a recommendation to use any loan product, down payment, or rate.
Cash flow is NOI minus debt service. The loan changes only the second term: rate, balance, amortization, and points decide the payment. Two buyers of the same property can have opposite monthly cash flow if one puts more down or pays a lower rate.
Use a written quote for the product you will actually close. Freddie Mac's 30-year fixed average is a public conventional-purchase benchmark, 6.76% as of September 10, 2026. It is not a DSCR, portfolio, or hard-money rate, and it is not your quote.
No. A conventional loan usually underwrites your personal income and debt-to-income ratio. A DSCR loan underwrites the property's NOI versus the proposed payment. The cash-flow identity is the same. The approval test is not.
It usually raises monthly cash flow because the loan balance and the payment fall. Cash-on-cash can move either way because you also put more cash in. Model both the dollar cash flow and the percentage on cash invested before you call the extra equity a win.
Not as market rent. FMR is a 40th-percentile voucher schedule. For a statistical median, use HUD 50th-percentile rents blended with Census ACS, then confirm with comps. Lenders may still use their own rent test. Ask what figure they will actually underwrite.
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