Fixed-Rate Mortgage

A fixed-rate mortgage keeps the same interest rate for the entire term, so principal and interest never change. The 30-year fixed is the standard DSCR loan, and it is the only structure where the ratio at closing stays accurate for as long as the rent and expenses do.

With the rate locked, only three things can move the ratio after closing: rent, property taxes and insurance. On the site example the payment stays at $2,622 of principal and interest for all 360 months. If taxes or premiums rise, PITI rises with them and the ratio slips, even on a fixed loan.

The fixed rate usually costs more than the opening rate on an ARM, which lowers the starting DSCR. On the example loan, a quarter point higher rate adds about $64 a month and takes the ratio from about 1.22 to 1.20. Borrowers trade that small loss of coverage for a payment that cannot reset.

Further reading: Fixed-Rate Mortgage on Wikipedia.