The interest rate on investment property loans is 0.5% to 1% higher than the interest rate on loans for properties where the borrower is expected to reside. This is because mortgage lenders believe it’s riskier to help someone finance homes they won’t live in. Additionally, the down payment on investment property loans can be as much as 25% of the property's purchasing price, depending on factors like the borrower’s credit history. This is starkly different from the down payment requirements for other types of home loans, such as FHA loans (3.5% to 10%) and VA loans (zero down).