Finance category
Mortgage, loan, investing, tax, and money calculators.
DSCR Calculator
Estimate the debt service coverage ratio lenders use to underwrite investor and rental property loans, and see whether the deal clears a typical lender minimum.
DSCR
1.10x
Below the lender minimum entered above.
Annual NOI
$24,840
Annual debt service
$22,538
NOI cushion vs payment
$2,302
Underwriting check
DSCR is positive but thin. Many DSCR lenders look for at least 1.20x; some go lower with offsetting reserves or rate adjustments.
Monthly debt service
$1,878
Required NOI for minimum
$27,046
NOI shortfall to minimum
$2,206
Debt service coverage ratio is annual NOI divided by annual mortgage payments. DSCR investor loans size and price the loan based on the property income, so the ratio drives both qualification and pricing.
How to Use
- Enter the monthly rent, vacancy assumption, and recurring monthly operating expenses.
- Add the loan amount, interest rate, and term you expect on the investor loan.
- Set the lender minimum DSCR — most non-owner-occupied DSCR loans require at least 1.10 to 1.25x.
- Review DSCR alongside annual NOI, annual debt service, and the NOI cushion versus the lender minimum.
Frequently Asked Questions
What is DSCR?
DSCR — debt service coverage ratio — is annual net operating income divided by annual mortgage payments. A 1.25x DSCR means NOI covers the loan payment 1.25 times over.
What DSCR do lenders typically want?
Many DSCR investor loans require at least 1.20 to 1.25x. Some programs allow 1.00x, occasionally lower with rate adjustments, larger reserves, or limited cash-out.
Is DSCR the same as cash flow?
No. DSCR is a ratio that compares NOI with debt service. Cash flow is the dollar amount left over after debt service. A 1.25x DSCR can be a small or large dollar cushion depending on property size.
Should I include taxes and insurance in DSCR?
Most lenders calculate DSCR on a PITIA basis, which includes principal, interest, taxes, insurance, and association dues. This calculator separates the loan payment so you can include taxes and insurance in operating expenses.
Can DSCR replace personal income for qualification?
On true DSCR investor loans, yes. Lenders qualify based on the property's income coverage rather than the borrower's W-2 income, which is why the ratio matters so much for non-owner-occupied financing.
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