How to Talk to Lenders When Rates Are Over 7%

How to Talk to Lenders When Rates Are Over 7%

When 7%+ rates are the norm, conversations with lenders matter more than ever.

The days of historically low interest rates are in the rearview mirror, and today’s investors are navigating a new reality: borrowing at 7% or higher. It’s not just about finding a willing lender, it’s about having the right conversation to make sure the deal still works for you.

Stop Talking “Best Rate” and Start Talking “Best Terms”

One of the first shifts in mindset? Stop obsessing over the lowest possible interest rate. In this climate, you’ll likely get more traction by focusing on loan terms that fit your investment strategy:

• Longer interest-only periods to preserve cash flow
• Flexible prepayment options so you can refinance if rates drop
• Loan structures that align with your hold period

A good lender conversation isn’t just “What’s your rate?” — it’s “Here’s my deal, here’s my plan, what structure works best for both of us?”

Know Your Numbers Before You Pick Up the Phone

When rates are high, lenders want to know you’ve done your homework. That means being ready to talk about:

• Your projected debt service coverage ratio (DSCR)
• The property’s rent roll and market comps
• Exit strategies (whether that’s refinance, flip, or long-term hold)

Having these numbers ready builds credibility and makes lenders more willing to tailor terms in your favor.

Position Yourself as a Problem Solver, Not a Risk

Lenders want reassurance. Show them you’re not just borrowing, you’re managing risk. That might mean:

• Demonstrating solid property management systems
• Showing reserves for unexpected expenses
• Explaining your contingency plan if market conditions change

It’s not about painting a perfect picture; it’s about showing you’ve planned for the “what ifs.”

Build Relationships Before You Need the Loan

This one’s easy to skip, but it’s often the difference maker. Lenders are more flexible with borrowers they know and trust. Even if you’re not ready to buy today, keep in touch: share market insights, update them on your projects, and ask about their lending in current conditions.

At 7%+, the rate alone isn’t the story. It’s the structure, relationship, and readiness you bring to the table. A thoughtful conversation with your lender can be the bridge between a “no” and a “let’s make it work.”

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