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DSCR Calculator Canada
Canadian lenders use DSCR to size rental mortgages — and with compressed cap rates, many properties struggle to clear 1.20. See your ratio and your maximum supportable loan.
Educational calculators — always consult a licensed professional before making financial decisions.
Gross rent across all units.
The mortgage you're requesting.
DSCR loan rates typically run above standard investor rates.
Most lenders require 1.20–1.25. Some accept 1.0 at a higher rate.
Tax, insurance, HOA, maintenance, management. Exclude the mortgage.
~5% is a common baseline.
25-year terms are typical.
DSCR
0.52
NOI $19,920 ÷ debt service $38,319
Against Common Lender Thresholds
Lender definitions vary — some compute DSCR against PITIA (principal, interest, taxes, insurance, association dues) rather than full NOI. Confirm the formula with your lender. Estimate only.
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DSCR in the Canadian market
DSCR is net operating income divided by annual debt service — whether the property earns enough to cover its own mortgage. In Canada this ratio is under real pressure: with national multifamily cap rates around 4.4% and Toronto/Vancouver closer to 3.5–4.5%, many urban rentals cannot reach the 1.20–1.25 that lenders prefer, which is why investors often need larger down payments than the 20% minimum to make a deal pencil.
For 5+ unit properties, CMHC's MLI Select program is the notable exception: its points-based tiers (affordability, energy efficiency, accessibility) allow DSCR minimums as low as 1.10, LTV up to 95%, and amortizations up to 50 years — dramatically improving the ratio. For 1–4 unit conventional deals, your levers are a smaller loan, longer amortization, higher rent, or lower expenses. Pair this with the cap rate and cash-on-cash calculators.
How it works
Enter rent and expenses
Input gross monthly rent, operating costs, and vacancy to derive NOI.
Enter the loan
Add loan amount, rate, and amortization for annual debt service.
Check the ratio
See your DSCR versus lender minimums and your max supportable loan.
DSCR minimums in Canada
| Financing type | Typical DSCR minimum |
|---|---|
| Conventional 1–4 unit investment | 1.20–1.25 |
| CMHC MLI Select (5+ units, 50 pts) | As low as 1.10 |
| CMHC MLI Select (100 pts) | Up to 95% LTV, 50-yr amortization |
MLI Select awards points for affordability, energy efficiency, and accessibility (min 50). Longer amortization raises DSCR but adds a premium surcharge (+0.25% per 5 years beyond 25).
Frequently asked questions
What is a DSCR loan?+
A DSCR (debt service coverage ratio) loan qualifies you on the property's rental income rather than your personal income — no tax returns or pay stubs needed. The lender simply checks whether the property's net operating income comfortably covers the mortgage payment. That makes DSCR loans popular with self-employed investors and anyone scaling a portfolio past what conventional debt-to-income limits allow.
What DSCR do lenders require?+
Most lenders require a minimum DSCR of 1.20–1.25 for the best terms, meaning the property earns 20–25% more than its debt payment. Some programs accept 1.0 — break-even, where rent exactly covers the mortgage — at a higher interest rate. A handful go below 1.0 (as low as 0.75) with compensating factors such as a larger down payment, strong credit, or cash reserves, but pricing is premium.
How is DSCR calculated?+
DSCR = net operating income ÷ annual debt service. NOI is your gross rent minus vacancy and operating expenses (taxes, insurance, maintenance, management) but not the mortgage. Annual debt service is your total yearly mortgage payments. A DSCR of 1.25 on $30,000 of debt service means the property produces $37,500 in NOI.
How can I improve a DSCR that's too low?+
You have four levers: borrow less (a smaller loan lowers debt service), stretch the amortization (a longer term lowers the annual payment), raise the rent, or cut operating expenses. Reducing the loan amount is the most direct fix — this calculator shows the maximum loan that still meets your target DSCR at the same rate and term.
Does DSCR use NOI or PITIA?+
It depends on the lender. Many residential DSCR programs compute the ratio as rent divided by PITIA (principal, interest, taxes, insurance, and association dues) rather than using full NOI, which excludes maintenance and management. That distinction can move your ratio meaningfully, so always confirm how your specific lender defines the formula before assuming you qualify.
Run your next deal through the numbers.
Back to the calculator ↑Cost ranges and rates here are checked against contractor quotes and published industry data. If a number still looks off, email Support@RealCostIQ.com and we'll review and fix it.