DSCR Calculator
Calculate your Debt Service Coverage Ratio — the key metric lenders use to evaluate investment property financing.
DSCR (Debt Service Coverage Ratio) compares a property's net operating income to its annual debt service. A DSCR of 1.25x means the property generates 25% more income than needed to cover debt payments. This calculator is for educational and illustrative purposes only and does not constitute lending approval or financial advice. Actual lender requirements vary.
What DSCR Means
DSCR (Debt Service Coverage Ratio) measures whether a property's income is sufficient to cover its debt payments. It's the primary metric lenders use to evaluate investment property financing — including DSCR loans, multifamily financing, and commercial real estate loans.
How It's Calculated
DSCR = Net Operating Income (NOI) ÷ Annual Debt Service. NOI is the property's income minus operating expenses (not including debt service). Annual debt service is the total of all principal and interest payments for the year. For example, if a property generates $100,000 in NOI and has $70,000 in annual debt service, the DSCR is 1.43.
Why It Matters
Lenders use DSCR to assess whether the property's cash flow can support the loan. A DSCR of 1.0 means the income exactly covers the debt — with no margin. Most lenders look for a minimum DSCR of 1.25, meaning the property generates 25% more income than needed to cover the debt. A higher DSCR gives more cushion and may improve financing terms.
Limitations
This calculator is illustrative only. It doesn't account for vacancy rates, capital expenditures, property management costs, or the specific underwriting guidelines of individual lenders. DSCR requirements vary by lender and loan program — some may require 1.20, others 1.30 or higher. Use this as a starting point, not a guarantee of qualification.
What to Do Next
Learn more about DSCR loans or how DSCR loans work. Or submit your information for a capital review.