DSCR Calculator for Rental Property
See the property the way a DSCR lender does: does its rent cover the mortgage with room to spare, and what’s the largest loan it can support at the ratio you need?
Watch a rate hike push a deal under the line
Same $240,000 loan, three rent scenarios. Slide the interest rate: the payment rises and every DSCR falls. The dashed line at 1.25 is where most lenders give their best terms; below 1.00 the rent no longer covers the mortgage.
Solid line = 1.00 · dashed line = 1.25 · bar end = 2.00
The two DSCR formulas (and why lenders disagree)
NOI method: DSCR = net operating income ÷ annual principal and interest. This is how commercial and multifamily lenders size loans, and it counts vacancy, repairs, reserves and management.
Rent ÷ PITIA method: DSCR = gross monthly rent ÷ (principal + interest + taxes + insurance + HOA). Most 1–4 unit “DSCR loan” lenders use this, often with rent taken from the appraiser’s rent schedule (Fannie Mae Form 1007) or an existing lease. It ignores vacancy and maintenance, so it reads higher than the NOI method for the same property.
Ask your lender which one they use and what rent figure they’ll accept. Underwrite your own decision on the stricter NOI number.
What DSCR do you need?
- 1.25+ — best pricing and highest loan-to-value with most DSCR lenders.
- 1.00–1.24 — usually approvable, often with a rate add-on or lower maximum LTV.
- Under 1.00 — only “no-ratio” programmes; expect 25–30% down and higher rates.
Questions investors ask
What is DSCR?
The debt service coverage ratio compares the income a property produces with the loan payments it has to cover. A DSCR of 1.25 means the property earns $1.25 for every $1.00 of debt payment; below 1.00 it doesn’t earn enough to pay its own mortgage.
How is DSCR calculated for a rental property?
The classic formula is net operating income ÷ annual debt service. Many residential DSCR loan programmes use a simpler version: gross monthly rent ÷ PITIA (principal, interest, taxes, insurance and HOA). This calculator shows both, because a lender will tell you which one it uses.
What DSCR do lenders require?
Most DSCR (investor cash-flow) loans look for at least 1.0 to 1.25, with the best rates and highest loan-to-value at 1.25 or above. Some lenders offer “no-ratio” programmes below 1.0 at higher rates and bigger down payments. Commercial and multifamily lenders commonly require 1.20–1.35.
What is a DSCR loan?
A DSCR loan is an investment property mortgage underwritten on the property’s rental income instead of your personal income, tax returns or debt-to-income ratio. They typically need 20–25% down, a credit score around 660 or higher, cash reserves, and a DSCR near 1.0–1.25.
How do I raise my DSCR?
Put more money down (smaller loan), buy the rate down, choose a longer amortization or interest-only period, raise rent to market, or cut operating costs such as insurance or HOA. The “maximum loan” figure shows exactly how big a loan the property can carry at your target ratio.