Ask most investors which loan is better, 70% or 75% loan to value, and they'll answer before you've finished the question. More leverage, less money in, better deal. Obviously. That's what I thought when I started out buying US rentals in 2016. I was wrong, and it led to me being woefully overleveraged.
The comparison in this article is a perfect example of how that logic can fall flat on its face. I recently got DSCR loan quotes on the exact same property, a Kansas City single family rental property I'm helping a non-resident client buy, from two different sources: a direct specialist lender, Waltz, at 70% LTV, and a well known broker marketplace at 75% LTV.
On the surface, the 75% option lets the buyer put $8,500 less down. But when you actually lift the hood and look at the whole quote, the higher LTV option needs more total cash to get to the closing table, at an interest rate half to a full point worse. I'll walk you through both quotes line by line, because how you read a DSCR quote matters more than any single number on it.
The deal, and the two quotes
The property is a turnkey single family rental in Kansas City, priced at $195,000, renting for $2,000 a month, with taxes of $695 a year and insurance of $1,281. This is a pretty textbook buy-box deal for me. The borrower is a foreign national from Germany, and I shopped the financing on their behalf.
Two quotes came back that make a perfect real world comparison. Waltz, a direct specialist lender I'm naming because the quote is theirs and it's a good one, proposed 70% LTV.
A broker marketplace, which I'll keep anonymous, quoted 75% LTV. Both are 30 year fixed DSCR loans with a 5 year prepayment penalty. Same property, same month, genuinely comparable, with one asterisk I'll come to in a minute.
Quote one: the direct specialist at 70% LTV
Waltz proposed a $136,500 loan, so a $58,500 down payment, and offered three pricing options on it, a classic points versus rate ladder:
Waltz pricing ladder at 70% LTV, $136,500 loan (preliminary quote, June 2026)| Line item | Option 1 | Option 2 | Option 3 |
|---|
| Rate | 7.125% | 6.875% | 6.625% |
| Origination and points | ~$515 | ~$2,220 | ~$3,930 |
| Monthly payment (PITI) | $1,084 | $1,061 | $1,039 |
| DSCR | 1.84 | 1.88 | 1.93 |
| Estimated cash to close | ~$66,776 | ~$68,483 | ~$70,189 |
Read that ladder carefully, because it's a great example of how paying points buys down the interest rate. You can pay about $515 in fees and take 7.125%, or pay roughly $3,900 and take 6.625%.
The cheapest cash to close and the cheapest monthly payment are different options. Which one wins depends on how long you hold the loan. I'll show you how to calculate your break even point on those fees later in this article.
Notice the DSCR ratio too: 1.84 to 1.93. The rent covers the payment nearly twice over, which is why this deal prices well. I talk more about that in my foreign national DSCR loan guide.
Quote two: the marketplace at 75% LTV
The marketplace quoted a $150,000 loan at 75% LTV, so a $50,000 down payment, at 7.625%. At first glance, this looks like a better deal. Lower deposit. Less money in the deal, right? Well, not quite.
The lender fees came to $5,178, including a $3,000 origination fee. That's the downside of using a broker rather than a direct lender. The middleman always takes his slice.
The biggest differentiator though was the reserve requirement, at $11,970. Put the whole quote together and the total estimated liquidity needed to close was $71,903.
So yes, the down payment is $8,500 lighter. But the total cash this deal demands is higher than any of the three 70% options, and the rate is 0.5 to 1.0% worse.
The side by side
Comparing the marketplace quote against Waltz's middle option:
The two quotes side by side (preliminary quotes, June and July 2026)| Line item | Waltz, 70% LTV (Option 2) | Marketplace, 75% LTV |
|---|
| Loan amount | $136,500 | $150,000 |
| Down payment | $58,500 | $50,000 |
| Rate | 6.875% | 7.625% |
| Lender fees and points | ~$2,220 | ~$5,178 |
| Reserves | $896 | $11,970 |
| Total cash needed | ~$68,483 | ~$71,903 |
| Monthly P&I | ~$897 | ~$1,062 |
Even reading this generously, the conclusion is unavoidable: the higher LTV deal needed more total cash, for a bigger loan, at a worse rate, with a higher monthly payment. So the buyer would have to bring more cash to the table, have less equity in the property, and pay a higher price for the debt.
The one thing to remember: a higher LTV means a smaller down payment, not a smaller pile of cash. Reserves and lender fees can swallow the difference and then some. Compare the total cash a quote demands and the rate it charges, never the LTV on its own.
Why the broker deal cost more
There are two factors to understand here.
First, reserves: the marketplace wanted nearly $12,000 held in liquid reserves, several times the specialist's requirement, and as I covered in my breakdown of how much cash you really need, reserves are cash you must have even though you don't spend them.
Second, fees: $5,178 against roughly $2,220, starting with a $3,000 origination fee.
Bigger reserves plus heavier fees more than erased the $8,500 down payment saving. And fees are dead money. They don't give you equity. In fact, they steal your equity. And the price of that down payment "saving" was a permanently higher rate on a permanently bigger loan, about $165 more per month.
None of this means higher LTV is always wrong. In another article I show a real restructure where nudging up the loan size genuinely cut the cash to close, because the whole package worked. That's the point: it's the whole package that should drive your decision, not just the LTV or interest rate.
The assumptions trap
There's one more lesson buried in this comparison.
The marketplace quote was built on the wrong property numbers: rent of $1,650 instead of the actual $2,000, and taxes of $10,000 a year instead of the actual $695. Feed those into the math and the quote's stated DSCR collapses to 0.83, which makes a strongly cash flowing property look like it doesn't cover its own mortgage.
The reason that happened is that the broker used automated assumptions rather than the information provided, whereas Waltz paid close attention to the real numbers.
The lesson is to always check the property details on any quote before you compare anything, because a quote built on wrong inputs isn't an accurate quote for your deal. And one small detail worth noticing: this quote also included a 714 FICO score, and it didn't help the pricing one bit, which is exactly the below-740 effect I wrote about in whether you really need US credit.
How to read any DSCR quote and calculate rate buydown breakeven
I've used DSCR loans to build my own portfolio, and I've run through hundreds of applications. Here's what I do when I'm reading a term sheet, in order.
- Check the property assumptions first: price, rent, taxes, insurance.
- Find the total cash the quote demands, down payment plus fees plus reserves, not just the down payment.
- Weigh the rate against the upfront cost, especially where a lender offers a points ladder. If you don't make the cost of the rate buydown back in monthly payments before your intended resale or refinance timeline, then it's not worth doing.
- Read the terms behind the numbers: the prepayment penalty, the reserve rules. I decode all of those in full in DSCR loan terms decoded.
- Compare quotes on the same basis, since each lender formats its bottom line differently.
On step three, the math is simple. If a rate buydown costs $3,000 upfront and saves you $50 a month, it'll take 60 months of payments to make that money back. If you intend to sell or refinance before that point, it's not a saving, it's a cost.
You can pressure-test any quote's numbers with my free DSCR loan calculator, and the free tools in my foreign investor starter kit will help you run the full deal.
The bottom line
On this real Kansas City deal, the 70% LTV quote from the direct specialist beat the 75% LTV marketplace quote on total cash, rate, fees, and monthly payment, everything except the down payment line.
That's the whole lesson here. LTV tells you the size of the loan, not the quality of the deal. Read the entire quote, check its assumptions, and let the total cash and the total cost decide.
Remember, investing is a game of probabilities, not certainties. If you understand how to compare loans like for like, you'll be far better positioned to make the best possible decision.
Cashflow Rentals is a real estate consultancy. We are not a lender or mortgage broker. This article is general information, not legal, tax, or financial advice. The quotes shown are real preliminary proposals from June and July 2026, subject to each lender's due diligence, and terms change constantly. Always confirm your own numbers with a qualified mortgage professional.
