DSCR Calculator
Will your property qualify for a DSCR loan? Check the ratio before you apply.
Inputs
Edit any field — results recompute instantly.
DSCR lenders typically underwrite at 75-85% of gross rent as net rental income — this captures the haircut.
Results
Computed live from your inputs.
Most lenders require 1.20+. Some go as low as 1.00, others as high as 1.25.
The minimum monthly rent to clear DSCR 1.0. Below this, the property doesn't carry its debt.
What this calculator does
Debt Service Coverage Ratio (DSCR) is what investment-property lenders use instead of personal income to underwrite loans. A 1.20 ratio means the property generates 20% more income than its debt payment. This calculator computes your DSCR from rent, expenses, and loan terms.
How to calculate DSCR
- Compute monthly P&I payment from loan amount, rate, and term.
- Add monthly taxes + insurance for full PITI.
- Apply a 10-15% haircut to gross rent for vacancy + maintenance reserve (lenders use a similar adjustment).
- Divide net rent by PITI — that's your DSCR.
- Most lenders need 1.20+ to underwrite. Check with your lender on the exact threshold.
Terms worth knowing.
Debt Service Coverage Ratio (DSCR) is the ratio of a property's annual net operating income to its annual debt service. A DSCR of 1.20 means the property generates 20% more income than it needs to cover the loan payment. Most DSCR lenders require 1.10-1.25 to underwrite.
PITI stands for Principal, Interest, Taxes, and Insurance — the four components of a typical mortgage payment. PITI is the total monthly housing cost most lenders use for DTI calculations, and the number rental cash-flow analyses subtract from gross rent.
Loan-to-value ratio (LTV) is the loan amount divided by the property's appraised value, expressed as a percentage. LTV drives lender pricing, down payment requirements, and PMI thresholds. Lower LTV = lower risk to lender = better rates and terms.
Capitalization Rate (cap rate) is a property's annual NOI divided by its purchase price (or current market value), expressed as a percentage. It's an unlevered yield metric — the return an all-cash buyer would earn before financing.
BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat — a real-estate investing strategy where an investor buys a distressed property cheap, renovates it, rents it out, refinances at the improved appraisal to recover most or all of the original capital, then repeats the process with the recovered capital.
More REI math tools.
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