DSCR calculator
Estimate your debt service coverage ratio and see how much loan a property's income can support. Use it to plan a deal before you talk to a loan expert.
Debt service coverage
Enter your numbers to see where this deal lands.
- Net operating income
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- Monthly PITIA
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- Monthly principal & interest
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- Annual debt service
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- Cash flow after debt service
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- Loan to value
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- Cap rate
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- Break-even occupancy
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- Cash-on-cash return
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- Supportable loan
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An estimate for planning only, not a loan offer or commitment. Lenders underwrite from their own documentation, and coverage requirements vary by program, property type and market.
What DSCR means
One question: does the property earn enough to pay its mortgage?
DSCR stands for debt service coverage ratio. It compares what a property earns with what its loan costs each year.
The total of your loan payments for the year, principal and interest.
How many times the property's income covers those payments.
How to calculate DSCR
Divide the property's net operating income by its annual loan payments.
Net operating income (NOI) is the property's income after operating expenses like taxes, insurance, management, repairs and utilities. It does not subtract the mortgage. The mortgage is the debt service you're comparing against.
Worked example: a four-unit building
- Annual rent$96,000
- Operating expenses− $30,000
- Net operating income$66,000
- Annual debt service÷ $55,000
- DSCR1.20
The property earns 20% more than it needs to cover the loan.
How lenders use DSCR
A higher number means more cushion for a vacancy or a repair bill.
- Below 1.00The property doesn't cover its payments. Most lenders decline.
- 1.00 – 1.19Breaks even or close to it. Often financeable, usually with a smaller loan.
- 1.20 – 1.25The standard target for most lenders.
- 1.25 and upStrong coverage. Usually the best pricing and most leverage.
Minimum DSCR requirements typically run from 1.00x to 1.25x, depending on the program and property type.
DSCR also caps how much you can borrow
Lenders work backward from the property's income: they find the largest payment the income supports at their required ratio, then size the loan to match. That's the supportable loan the calculator shows.
The largest loan the property's income can pay at the lender's required DSCR.
The loan as a share of the property's value, set by the program.
Whichever cap is smaller sets the most you can borrow.
Two ways to calculate it
The calculator has two modes, because lenders look at different property types differently.
Used for apartment buildings, retail, office, industrial and mixed-use.
PITIA is principal, interest, taxes, insurance and association (HOA) dues. Used for rental homes and small multifamily on DSCR loans. Lenders use the lower of the lease rent or the appraiser's market rent.
Many DSCR programs also ask for cash reserves, commonly six months of PITIA.
A planning tool, not a loan offer
The calculator gives an estimate for planning only. It is not a loan offer or commitment. Lenders underwrite income and expenses from their own documentation, and coverage requirements vary by program, property type and market.
Your loan expert can check them against current lending partner requirements.
Common questions
What is a good DSCR?
For most lenders, 1.20 to 1.25 is the standard target. A DSCR of 1.25 or higher is strong coverage and usually gets the best pricing and the most leverage.
What DSCR do lenders require?
Minimum DSCR requirements typically run from 1.00x to 1.25x, depending on the program and property type.
Is the mortgage included in net operating income?
No. NOI is income after operating expenses like taxes, insurance, management, repairs and utilities. The mortgage is the debt service you divide NOI by.
What rent do lenders use for a 1–4 unit rental?
Lenders use the lower of the lease rent or the appraiser's market rent, divided by PITIA: principal, interest, taxes, insurance and association dues.
Is the calculator result a loan offer?
No. It is an estimate for planning only. Lenders underwrite from their own documentation, and requirements vary by program, property type and market.
Ready to take the next step?
Apply in about a minute. Your loan expert will guide you from there.