DSCR calculator
Debt service coverage ratio for a rental and the largest loan it supports at 1.0 to 1.35.
- ๐บ๐ธ US federal & state rules
DSCR
1.14
Covers the loan, below the common 1.20 to 1.25 minimum
- Net operating income
- $22,920
- Yearly debt service
- $20,137
- Monthly payment
- $1,678.11
- Cash left after the loan
- $2,783
This is an example. Enter your numbers above and press the button to see your own result.
Largest loan at 7.5% for 30 years
| DSCR 1.00 | $273,164 |
|---|---|
| DSCR 1.10 | $248,331 |
| DSCR 1.20 | $227,636 |
| DSCR 1.25 | $218,531 |
| DSCR 1.35 | $202,343 |
- Many lenders look for 1.20 to 1.25 on rental and commercial loans, and some DSCR loan programs go down to 1.0. Ask your lender for its number.
- Some DSCR lenders divide gross rent by the full payment including tax, insurance and HOA (PITIA) instead of using NOI. Their result will differ from this one.
Show the math
| NOI | $2,800 ร 12 ร (1 โ 5%) โ $9,000 = $22,920 |
|---|---|
| Debt service | $1,678.11 ร 12 = $20,137 |
| DSCR | $22,920 รท $20,137 = 1.14 |
What to do next
How it works
Net operating income is yearly rent after vacancy minus operating expenses. Debt service is 12 months of loan payments. DSCR is NOI divided by debt service.
The table works backward and shows the largest loan the property supports at each DSCR level, using your rate and term.
Things to keep in mind
Lenders differ in how they count income and payments. Some use 75% of market rent, and some include tax and insurance in the payment instead of in expenses.
Frequently asked questions
How is DSCR calculated?
Divide net operating income by yearly loan payments. $22,920 of NOI against $20,137 of payments is a DSCR of 1.14.
What DSCR do lenders require?
Many look for 1.20 to 1.25 on rental and commercial loans. Some DSCR loan programs accept 1.0 or slightly below at a higher rate.
What does a DSCR below 1 mean?
The property's income does not cover the loan payments, so you would add money from your own pocket each month.