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DSCR Calculator
DSCR loans qualify on the property's income, not yours. Enter rent, expenses, and loan terms to see your ratio, whether it clears lender thresholds, and the biggest loan you'd support.
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.
30-year terms are typical.
DSCR
0.91
NOI $19,500 ÷ debt service $21,489
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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How lenders read your DSCR
The debt service coverage ratio answers one question for a lender: does this property earn enough to pay its own mortgage? DSCR = net operating income ÷ annual debt service. A ratio of 1.0 means rent exactly covers the loan payment with nothing to spare. At 1.25 — the most common requirement — the property produces 25% more income than the debt costs, giving the lender a cushion against vacancy and repairs.
Why investors use DSCR loans. Because qualification rests on the property rather than your personal income, there are no tax returns or pay stubs involved. That matters enormously for self-employed borrowers whose write-downs depress reported income, and for investors who have hit the conventional debt-to-income ceiling and can't finance another door. The trade-off is pricing: DSCR loans typically carry rates above conventional investment mortgages.
If your ratio is short, you have four levers — borrow less, stretch the amortization, raise the rent, or cut operating expenses. Reducing the loan is the most direct: this calculator shows the maximum loan that still meets your target at the same rate and term. One caution worth repeating — many residential DSCR programs compute the ratio against PITIA (principal, interest, taxes, insurance, association dues) rather than full NOI, which excludes maintenance and management. Ask your lender which formula they use. Then confirm the deal itself with cap rate and cash-on-cash return.
How it works
Enter rent and expenses
Input gross monthly rent, operating expenses, and a vacancy allowance to derive NOI.
Enter the loan
Add loan amount, interest rate, and term to compute annual debt service.
Check the ratio
See your DSCR versus 1.0 / 1.20 / 1.25 and the max loan at your target.
What lenders require by DSCR tier
| DSCR | What it means | Typical lender treatment |
|---|---|---|
| Below 1.0 | Rent doesn't cover the mortgage | Usually declined; some programs to 0.75 with reserves at premium pricing |
| 1.0 | Break-even | Accepted by some lenders at a higher rate |
| 1.20 | 20% income cushion | Common minimum for good terms |
| 1.25+ | 25%+ cushion | Most common requirement; best pricing |
Definitions vary — many residential DSCR programs use PITIA rather than full NOI. Confirm the formula with your lender.
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.
Know your ratio before you apply.
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.