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DSCR Calculator

Enter rent, operating expenses, and loan terms to see your Debt Service Coverage Ratio update live. Built for investors qualifying for DSCR loans.

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Income

Used to compute Net Operating Income.

$
%
$

Taxes, insurance, management, maintenance, capex. Exclude mortgage.

Financing

Used to compute Annual Debt Service.

$
%
yrs
Net Operating Income (NOI)$20,160
Annual Debt Service$22,921
Debt Service Coverage Ratio
0.88

Below 1.00. Income does not cover the mortgage. Most lenders decline.

Estimates only, not lending or investment advice. Lender underwriting standards vary.

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How a DSCR calculator works

DSCR is the first number a DSCR lender looks at, and for good reason. It strips the deal down to one question: does the property's income cover the mortgage with room to spare? The calculator computes it live from your rent, vacancy, operating expenses, and financing terms so you know whether the deal will pass underwriting before you ever talk to a lender.

The DSCR formula

DSCR = Net Operating Income (NOI) / Annual Debt Service

NOI is gross rent minus vacancy minus operating expenses (taxes, insurance, management, maintenance, capex). Debt service is 12 months of principal and interest. Taxes and insurance are already deducted in NOI, so they do not appear again in the denominator.

DSCR thresholds lenders use

Lenders bucket DSCR into clear bands. Knowing where your deal sits before you apply saves time and protects your credit pulls.

  • 1.50+Excellent. Strong coverage, best rates and terms.
  • 1.25Healthy. Most DSCR lenders' sweet spot.
  • 1.20Acceptable. Some lenders approve, may charge slightly higher rates.
  • 1.00Tight. Limited lender pool, higher points, may require reserves.
  • <1Negative coverage. Property does not pay for itself. Most lenders decline.

Where investors miscalculate DSCR

  • Forgetting vacancy. A property that books $2,400/mo but has 8% vacancy generates $2,208/mo effective. Skipping vacancy inflates DSCR by 5-10%.
  • Omitting capex reserves. Lenders and smart investors both reserve for roofs, HVAC, and water heaters. Do not model maintenance at $0.
  • Using gross rent instead of NOI. DSCR is not rent divided by mortgage. It is NOI divided by debt service. Using gross rent overstates coverage significantly.
  • Ignoring PMI or higher-rate adjustments. If your down payment is below 20% or your rate is above market, the debt service jumps and DSCR drops.

DSCR by strategy

  • Long-term rental: The classic DSCR use case. Stable rent, predictable expenses, straightforward NOI.
  • BRRRR refinance: Lenders evaluate post-refi DSCR using the new loan amount and stabilized rent. This is often the make-or-break number for the refi.
  • Short-term rental: DSCR lenders are increasingly accepting STRs, but they use a 12-month average or a stress-tested occupancy rate. Do not use peak-season numbers.

Glossary

DSCR
Debt Service Coverage Ratio. NOI divided by annual debt service.
NOI
Net Operating Income. Rent minus operating expenses, before debt service.
Debt service
Total principal and interest payments over 12 months.
DSCR loan
A non-QM loan underwritten on property income rather than borrower personal income.
Coverage ratio
Another term for DSCR. How many times the income covers the debt.

Frequently asked questions

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Estimates only, based on the inputs you provide and third-party data. Not investment, tax, accounting, or legal advice. See our full disclaimer.