DSCR Loan Calculator
Calculate Debt Service Coverage Ratio for investment properties. Instantly see if your rental income covers the loan, plus max qualifying loan amount.
How It Works
DSCR (Debt Service Coverage Ratio) compares a property's Net Operating Income (NOI) to its debt obligations. It helps lenders evaluate if a property generates enough cash to pay the mortgage.
Formula
DSCR = Net Operating Income (NOI) / Annual Debt Service
A DSCR of 1.0 means the property generates exactly enough income to cover the debt. Lenders usually want 1.20 to 1.25 to provide a 20-25% cushion.
Worked Example
Calculating DSCR for a Rental Property
- Monthly Gross Rent: $3,000 ($36,000/year)
- Operating Expenses (Taxes, Insurance, HOA, Vacancy): $10,000/year
- Net Operating Income (NOI): $36,000 - $10,000 = $26,000/year
- Monthly Mortgage Payment (P&I): $1,500 ($18,000/year)
- DSCR = $26,000 / $18,000 = 1.44
Common Mistakes
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Using gross rent instead of NOI
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Always subtract operating expenses (taxes, insurance, maintenance) from rent before calculating DSCR.
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Forgetting to include vacancy rates
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Lenders typically deduct 5-10% from gross rents to account for vacancies.
Frequently Asked Questions
Related Guide & Instructions
2026-07-10
Understanding DSCR: How to Calculate Debt Service Coverage Ratio
Master the Debt Service Coverage Ratio (DSCR). Learn what lenders look for, the exact formula, and how to evaluate real estate investments like a pro.
Read full guide →Related Calculators
DisclaimerThe results provided by this calculator are estimates and for informational purposes only. They do not constitute financial, legal, or professional advice. Please consult with a qualified professional for your specific needs.