DSCR (Debt Service Coverage Ratio) Calculator
DSCR = NOI / annual debt service. Lenders typically require ≥ 1.20-1.25.
Result
Loading calculator…
—
How to use this calculator
- Enter NOI and annual mortgage P&I.
- Read DSCR.
About this calculator
DSCR measures how comfortably a property's NOI covers its mortgage. DSCR < 1 means the property doesn't generate enough to pay debt (negative cash flow). Lenders for investment properties typically require DSCR ≥ 1.20-1.25; commercial loans may require 1.30-1.40+. Higher DSCR = lower risk for lender.
Frequently asked
What DSCR do lenders require?+
DSCR loans (designed for investors): 1.0-1.25 minimum. Standard commercial: 1.25-1.30. Higher leverage or risky property: 1.40+.
How to improve DSCR?+
Increase NOI (raise rents, cut expenses) or reduce debt (larger down payment, longer amortization).
Annual or monthly debt?+
Use annual to match annual NOI. (Monthly P&I × 12.)
Does DSCR include taxes?+
Property taxes are in NOI (operating expense). Federal income tax is separate from DSCR.
DSCR loans?+
A loan product where lender qualifies you on the property's DSCR rather than your personal income — popular for investors.
Related calculators
Cap Rate Calculator
Capitalization rate = NOI / Property Value × 100. Property's annual return excluding financing.
Cash-on-Cash Return Calculator
Annual pre-tax cash flow / total cash invested × 100. Measures return on actual money in.
NOI (Net Operating Income) Calculator
NOI = gross income − operating expenses. Excludes mortgage payments, capex, depreciation, and income tax.
Rental Property ROI Calculator
Total return = (cash flow + appreciation + principal pay-down + tax benefit) / cash invested. The full picture.
50% Rule Calculator
Rule of thumb: operating expenses ≈ 50% of gross rent. Quick NOI estimator.
1% Rule Calculator
Quick rental screening: monthly rent should be ≥ 1% of purchase price.