Calculate DSCR from NOI and debt service, see lender qualification at 1.00, 1.20, and 1.25, and estimate the max DSCR loan your property supports.
Start with a typical DSCR scenario, then adjust rent, expenses, loan amount, and rate to match your actual property.
Include taxes, insurance, property management, maintenance, vacancy, and HOA in monthly operating expenses for the most accurate NOI.
Enter income, loan amount, interest rate, and term to calculate your DSCR.
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The debt service coverage ratio (DSCR) measures how well a property's net operating income covers its annual debt payments. Lenders use DSCR to size DSCR loans for rental properties and commercial real estate, and they typically require a minimum DSCR of 1.20 to 1.25 to approve a loan. This calculator lets you compute DSCR from NOI or from monthly rent minus expenses, check qualification against the standard 1.00, 1.20, and 1.25 thresholds, and estimate the maximum loan amount your property's cash flow can support at a chosen target DSCR.
The debt service coverage ratio is the ratio of net operating income to annual debt service. A DSCR of 1.00 means the property earns exactly enough to pay its mortgage. A DSCR of 1.25 means the property earns 25% more than the payment, leaving a cushion for vacancy, repairs, and rate changes. DSCR is the central underwriting metric for DSCR rental loans, which qualify the borrower based on the property's cash flow rather than personal income.
Formula
See whether your property clears the typical 1.00, 1.20, and 1.25 DSCR thresholds before you apply for a DSCR loan or commercial mortgage.
Use the max-loan calculation to find the largest loan your NOI can support at a chosen target DSCR, given the current rate and term.
DSCR loan rates move quickly. The rate sensitivity table shows how your DSCR changes if the rate moves up or down by half a percent or a full percent.
Plug in monthly rent and operating expenses and the calculator converts them to annual NOI automatically, so you can compare properties on a true cash-flow basis.
Recalculate DSCR at today's rate to see whether your existing property still qualifies, or what target rent and expense levels are needed to refinance into a DSCR loan.
A DSCR below 1.00 means the rent does not cover the mortgage. This calculator flags that immediately and shows the NOI you would need to reach break-even.
Investors use DSCR loans to qualify based on rental income instead of personal income. Use this calculator to confirm the property can clear the lender's DSCR minimum before applying.
STR investors can plug in projected nightly rate × occupancy as monthly rent, then subtract cleaning, management, and platform fees as operating expenses to test DSCR coverage.
For 2-4 unit and small multifamily deals, calculate DSCR using total rent roll minus operating expenses to evaluate a purchase or refinance.
Commercial lenders typically require DSCR between 1.20 and 1.30. Use the NOI mode to underwrite office, retail, industrial, or mixed-use deals.
Recalculate DSCR at today's interest rate to see whether your existing property still qualifies for a cash-out or rate-and-term refinance.
Solve for the NOI you need to clear a target DSCR, then back into the rent increase or expense cut required to get there.
Debt service coverage ratio (DSCR) is the ratio of a property's net operating income to its annual debt service. It tells a lender how much cash flow the property has available to cover its mortgage. A DSCR of 1.25 means the property generates 25% more NOI than the loan payment.
For most DSCR loan programs, a good DSCR is 1.25 or higher. A DSCR of 1.20 is the common floor for conventional commercial real estate debt. A DSCR of 1.35 or higher is considered strong and may qualify for better pricing. A DSCR below 1.00 means the property does not cover its debt service.
DSCR is calculated as Net Operating Income divided by Annual Debt Service. NOI equals rental income minus operating expenses (taxes, insurance, maintenance, vacancy, property management, HOA), excluding the mortgage payment itself. Annual Debt Service is the total mortgage principal and interest paid over twelve months.
Most DSCR rental loan programs require a minimum DSCR of 1.20 to 1.25. Some lenders offer no-ratio or sub-1.0 DSCR loans, but those usually come with higher rates, larger down payments, and reserve requirements. The exact minimum varies by lender, property type, and loan-to-value ratio.
DSCR measures a property's ability to cover its own debt using its rental income. DTI (debt-to-income ratio) measures a borrower's personal ability to cover all debts using personal income. DSCR loans use the property's DSCR for qualification, so they often skip the personal DTI check, which is why investors use them to scale a rental portfolio.
Some lenders offer sub-1.0 DSCR loans, often called no-ratio or low-ratio DSCR programs. These typically require a larger down payment (often 25-30%), higher interest rates, and stronger credit. A DSCR below 1.00 means the property does not fully cover the loan payment, so reserves and credit usually need to compensate.
DSCR includes taxes and insurance on the income side, because they are part of operating expenses that reduce NOI. On the debt service side, traditional DSCR uses only loan principal and interest, while some DSCR rental loan programs require PITIA (principal, interest, taxes, insurance, and association dues). Always confirm which definition your specific lender uses.
You can improve DSCR by increasing NOI (raise rent, reduce vacancy, cut operating expenses) or by reducing annual debt service (lower the loan amount, extend the loan term, lock in a lower interest rate, or buy down the rate). Use the maximum loan and break-even NOI outputs to see exactly how each lever changes your ratio.