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DSCR Calculator for Rental Property

Free debt service coverage ratio (DSCR) calculator for rental loans. Enter rent, vacancy, operating costs and your loan to see DSCR on an NOI basis and a lender-style PITIA basis, plus the maximum loan supported at your target DSCR.

Lease or market rent. Lenders differ on which they use.
Used on the NOI basis.
Optional; part of PITIA.
Optional; part of PITIA.
Optional; part of PITIA.
Management, maintenance, repairs, reserves. NOI basis only.
For the maximum-loan figures. Many lenders look around 1.0 to 1.25+.

What DSCR measures

The debt service coverage ratio (DSCR) asks one thing: does the property's income cover its loan payments, and by how much? A DSCR of 1.00 means the income exactly covers the payment. Above 1.00 there is a buffer; below 1.00 the property cannot pay for itself and money has to come from somewhere else. DSCR is the headline number for investor "DSCR loans" and a standard check in commercial lending.

This DSCR calculator shows two versions, because they are both in common use:

  • NOI basis: annual net operating income (rent after vacancy, minus taxes, insurance, HOA and other operating costs) ÷ annual principal and interest.
  • Lender style (PITIA): monthly rent ÷ the full monthly payment including principal, interest, taxes, insurance and association dues. Many DSCR loan programs describe the test this way.

Worked example using the calculator defaults

The calculator loads with $2,000 monthly rent, 5% vacancy, $2,400 a year property tax, $1,200 a year insurance, no HOA, $2,400 a year of other operating costs, a $160,000 loan at 7% over 30 years, and a 1.25 target DSCR. Rounded to the nearest dollar:

  • Rent collected: $24,000 less 5% vacancy ($1,200) = $22,800.
  • Operating costs: $2,400 + $1,200 + $0 + $2,400 = $6,000.
  • NOI: $22,800 − $6,000 = $16,800.
  • Principal and interest: $160,000 at 7% over 30 years = $1,064/month, or $12,774 a year.
  • DSCR, NOI basis: $16,800 ÷ $12,774 = 1.32×.
  • PITIA: $1,064 + $200 tax + $100 insurance + $0 HOA = $1,364/month. Lender-style DSCR: $2,000 ÷ $1,364 = 1.47×.
  • Maximum loan at a 1.25 target, NOI basis: $16,800 ÷ 1.25 ÷ 12 = $1,120/month of principal and interest, which supports a loan of about $168,344.
  • Maximum loan at a 1.25 target, lender style: $2,000 ÷ 1.25 = $1,600 a month for the full payment, less $300 of taxes and insurance leaves $1,300 for principal and interest, supporting about $195,400.

The two methods give different answers because the NOI basis deducts vacancy and operating costs that the lender-style test ignores. Neither is "right"; which one applies depends on the lender and loan program.

Common DSCR lender thresholds

Requirements differ by lender, loan type, property type, borrower profile and the market, so these are general ranges only and not a quote, a promise or advice:

DSCRWhat it generally signals
Below 1.00Income does not cover the payment. Some investor loan programs allow it, often with a larger down payment or a higher rate; many lenders will not.
About 1.00 to 1.20Covers the payment with little buffer. Often seen as a minimum for investor DSCR loans, sometimes with pricing adjustments.
About 1.20 to 1.35 or moreA comfortable cushion. Commercial lenders commonly look in this area, and better pricing is sometimes available at higher ratios.

Use the maximum-loan figures as a rough sizing aid: set the target to what a lender you are talking to asks for, then compare the answer with the loan you want. Ask the lender how it counts rent, vacancy and expenses before relying on either number.

What this DSCR calculator does not include

It uses one fixed-rate, fully amortizing loan with no interest-only period, points, reserves or prepayment terms, and it does not model personal income, credit or down-payment rules that a lender will also apply. Treat the output as an estimate and confirm real terms with a lender. To look at the same property from other angles, try the rental property cash flow calculator (which also shows a DSCR), the cap rate calculator and the BRRRR calculator.

Frequently asked questions

What is DSCR in real estate?

DSCR stands for debt service coverage ratio. It is a property's income available to pay debt divided by its debt payments. A DSCR of 1.0 means income exactly covers the loan payments; above 1.0 there is a cushion, below 1.0 the property does not cover its own debt.

How do you calculate DSCR for a rental property?

There are two common ways. The traditional approach divides annual net operating income (rent after vacancy minus operating costs) by annual debt service. Many DSCR loan programs instead divide the monthly rent by the full monthly housing payment, called PITIA: principal, interest, taxes, insurance and association dues. This calculator shows both so you can see how they differ.

What DSCR do lenders require?

It varies by lender, loan type and property. As a general range, many lenders look for a DSCR of roughly 1.0 to 1.25 or higher, with lower ratios sometimes allowed at higher rates, larger down payments or stronger borrower profiles, and commercial lenders often looking for around 1.20 to 1.35. These are general reference points, not a quote or advice; ask lenders for their current requirements.

What is a DSCR loan?

A DSCR loan is a type of investor mortgage qualified mainly on the property's rental income rather than the borrower's personal income. The lender compares expected rent with the payment. Terms, rates, down payment requirements and what counts as rent differ between lenders.

How does the maximum loan at a target DSCR work?

Divide the income by your target DSCR to find the largest payment the property can support, then work backward from that payment, the interest rate and the term to the loan amount that produces it. A higher target ratio, a higher rate or lower rent all reduce the maximum loan.

Why are there two different DSCR numbers here?

The NOI basis deducts vacancy and all operating costs before comparing with the principal and interest payment. The PITIA basis compares gross rent with the full payment including taxes and insurance, which is closer to how many DSCR loan programs describe it. Lenders differ on whether they use lease rent or market rent and whether they apply a vacancy haircut, so use this as an estimate.

Related rental property calculators

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