Free DSCR Calculator — Debt Service Coverage Ratio
DSCR loans qualify you on the property's cash flow — not your W-2. Lenders divide net operating income by the mortgage payment, and most want to see at least 1.25x coverage. Enter your numbers to find your ratio, your rating band, and the maximum loan your property supports.
Income
Operating expenses
Loan terms
Your DSCR
1.08x
$24,864 NOI ÷ $22,921 annual debt service
Max supportable loan at 1.25x coverage
$242,987
At your current rate and term, this is the largest loan this property's NOI supports while holding a 1.25 DSCR.
| NOI breakdown | Annual |
|---|---|
| Gross rental income | $36,000 |
| Less: vacancy (5%) | −$1,800 |
| Effective gross income | $34,200 |
| Less: operating expenses | −$9,336 |
| Net operating income (NOI) | $24,864 |
| Annual debt service (P&I) | $22,921 |
Estimate only — not a loan offer or tax advice. DSCR lenders underwrite with their own vacancy, expense, and rent inputs (often from the appraisal's Form 1007), so your lender's number may differ from this estimate.
What is a good DSCR ratio?
The debt service coverage ratio measures how comfortably a property's income covers its mortgage: DSCR = annual net operating income ÷ annual debt service. A ratio of 1.25 means the property earns 25% more than the loan requires — the cushion lenders want before offering their best terms.
- 1.25x and above — excellent. Clears the bar for the best DSCR rates, highest leverage (often up to 80% LTV), and the widest choice of lenders.
- 1.00x–1.24x — approvable. The property covers its mortgage but with a thinner cushion. Most DSCR lenders will still fund it, typically with slightly higher rates or lower max LTV.
- Below 1.00x — below minimums. The property does not pay for itself. A few lenders go down to ~0.75x with heavy pricing adjustments, but restructuring the deal is usually the smarter move.
The single most common mistake is computing DSCR on gross rent instead of NOI. Vacancy, taxes, insurance, and maintenance are real costs — lenders subtract all of them before they divide.
5 ways to improve your DSCR before applying
1.Raise the rent (or prove market rent)
Even a 5% rent increase flows almost entirely to NOI. If current rents are below market, a rent survey supporting higher market rents can lift the lender's income number.
2.Put more down
A larger down payment shrinks the loan amount and the monthly payment directly. Dropping from 80% to 75% LTV often moves a 1.15x deal into the 1.25x tier.
3.Buy down the rate or extend amortization
Paying points for a lower rate — or choosing interest-only or 40-year amortization where offered — reduces annual debt service and lifts the ratio without touching the property.
4.Cut operating expenses
Shop insurance, appeal the property tax assessment, and self-manage where practical. Every $1,000 of annual expense you remove adds $1,000 to NOI.
5.Add income, not just units
An ADU, a rented garage, storage, or pet fees all raise effective gross income. Lenders count documented ancillary income toward NOI.