DSCR Calculator — Debt Service Coverage Ratio for Rental Loans
Calculate your DSCR (Debt Service Coverage Ratio) to see if a rental property qualifies for a DSCR loan. Most lenders require ≥ 1.25. Enter rent, expenses, and mortgage payment — get your ratio and qualification status instantly. Free.
Debt Service Coverage Ratio (DSCR) = Net Operating Income ÷ Annual Debt Service. Most investment-property lenders require DSCR ≥ 1.20–1.25; a ratio below 1.0 means the property cannot cover its own mortgage from rental income. DSCR loans qualify borrowers on the property's income rather than personal income, making them popular with investors who hold multiple properties.
Inputs
Taxes, insurance, maintenance — exclude mortgage
Results
DSCR
NaN
Lenders typically require ≥ 1.25
Annual NOI
$NaN
Annual Debt Service
$24,000
Qualifies (1.25 threshold)
✗ Below threshold
Understanding This Calculator
Learn how lenders use the debt service coverage ratio to decide whether a rental property's income can safely carry its mortgage.
How the math works
DSCR = NOI ÷ annual debt service.
NOI is calculated exactly as in the cap-rate calculator: annual rent × (1 − vacancy) − operating expenses (taxes, insurance, maintenance — never the mortgage itself). Annual debt service is the mortgage payment × 12.
A DSCR of 1.0 means the property's income exactly covers the mortgage with nothing to spare. Above 1.0 there is a cushion; below 1.0 the property cannot pay its own loan and you subsidize it from other income. Most DSCR lenders require 1.20–1.25, qualifying the deal on the property's income rather than yours.
Worked example
Using the defaults: rent $3,000/month, 5% vacancy, $8,000 annual expenses, mortgage $2,000/month.
- Effective gross rent = 3,000 × 12 × 0.95 = $34,200
- NOI = 34,200 − 8,000 = $26,200
- Annual debt service = 2,000 × 12 = $24,000
- DSCR = 26,200 ÷ 24,000 = 1.09
At 1.09 this property covers its mortgage with only a 9% cushion — below the typical 1.25 lending threshold, so it would not qualify for most DSCR loans as structured.
How to read the result
Rules of thumb:
- ≥ 1.25 — qualifies with most DSCR lenders; a healthy margin for vacancies and repairs.
- 1.0–1.2 — technically cash-flowing but thin; some lenders accept 1.20, few go lower without compensating strengths.
- < 1.0 — the property loses money against its debt; expect declines or much larger down payments.
To raise a borderline DSCR: increase the down payment (smaller loan, smaller payment), extend the amortization, negotiate a better rate, or document higher market rent. Even a $100/month rent increase moves this example from 1.09 to about 1.14.