About the DSCR Calculator
This DSCR calculator measures whether a property’s income covers its loan payments — the test lenders use for DSCR (debt service coverage ratio) investment loans and for commercial mortgages. Enter the monthly rent, loan amount, rate and term, plus property tax, insurance and HOA dues. The calculator works out the payment, the DSCR and whether it clears your lender’s minimum.
Two methods are available. Residential DSCR loans for 1–4 unit rentals usually divide gross monthly rent by the full PITIA payment (principal, interest, taxes, insurance and association dues). Commercial and multifamily lenders usually divide net operating income by principal and interest. Pick the method your lender uses; the calculator also shows the largest loan the property supports at your target DSCR and the rent you would need.
Because a DSCR loan qualifies on the property rather than your personal income, it is popular with self-employed investors and people who own several rentals. Lender minimums, rent sources (lease or appraisal rent schedule) and short-term rental rules vary, so treat the result as a pre-qualification estimate.
With the default inputs, the dscr is 1.26. Change any value above to recalculate instantly.
How to use the dscr calculator
- 1Choose the method: rent ÷ PITIA for a residential DSCR loan, or NOI ÷ debt service for commercial.
- 2Enter the monthly rent from the lease or market rent estimate.
- 3Enter the loan amount, rate and term.
- 4Add monthly tax, insurance and HOA (plus vacancy and other expenses for the NOI method).
- 5Set your lender’s minimum DSCR and review the maximum loan and rent needed.
Formula and method
Residential DSCR lenders typically divide the gross monthly rent (from the lease or the appraiser’s rent schedule) by the full housing payment: principal and interest plus property tax, insurance and HOA dues. Commercial lenders divide net operating income — rent after vacancy and all operating expenses including taxes and insurance — by annual principal and interest.
A DSCR of 1.00 means income exactly covers the debt; 1.25 means there is 25% more income than debt service. The maximum loan reverses the formula: it finds the largest principal-and-interest payment the property supports at the target ratio and converts it to a loan amount with the present value of an annuity at your rate and term.
- PITIA
- Principal + interest + taxes + insurance + association dues
- NOI
- Rent × (1 − vacancy) − taxes − insurance − HOA − other expenses
- DS
- Debt service (principal and interest)
Worked examples
$3,000 rent on a $280k DSCR loan
A $280,000 loan at 7.5% for 30 years costs $1,957.80 a month; adding $300 tax and $120 insurance gives PITIA of $2,377.80. $3,000 ÷ $2,377.80 = 1.26, which clears a 1.25 minimum; at that ratio the property could support a loan of up to about $283,000.
Condo with HOA falls short
Principal and interest of $1,773.66 plus $690 of tax, insurance and HOA makes PITIA $2,463.66. Rent of $2,400 covers only 97% of that (DSCR 0.97), so you would need about $3,080 of rent — or a much smaller loan — to hit 1.25.
Small apartment building, commercial method
Rent of $18,000 less 7% vacancy is $16,740; subtracting $6,000 of tax, insurance and other expenses leaves NOI of $10,740 a month. A $1.4M loan at 6.75% over 25 years costs $9,672.76, so DSCR is 1.11 — below a typical 1.25 commercial requirement.
Frequently asked questions
What is a good DSCR?+
Most lenders want at least 1.20–1.25, meaning the property earns 20%–25% more than its debt payments. Residential DSCR lenders often offer the best pricing at 1.25 and above, and some will lend below 1.00 with a larger down payment and higher rate.
How is DSCR calculated for a DSCR loan?+
For 1–4 unit rental loans, lenders usually divide the monthly rent — the lower of the lease and the appraiser’s market rent, in many cases — by the monthly PITIA payment. $3,000 of rent against a $2,400 PITIA is a DSCR of 1.25.
Do DSCR loans require income verification?+
No personal income documentation such as W-2s or tax returns is usually required, because the loan qualifies on the property’s rent. Lenders still check credit, reserves, the appraisal and the down payment, which is typically 20%–25%.
What is the difference between DSCR and DTI?+
Debt-to-income (DTI) compares your personal debts with your personal income. DSCR compares a property’s income with that property’s debt payment. Conventional mortgages rely on DTI, while DSCR and commercial loans rely on the property’s coverage.
Can I use Airbnb income for a DSCR loan?+
Some DSCR lenders accept short-term rental income, usually based on 12 months of booking history or a third-party revenue projection, and they may apply a haircut or require a higher ratio because the income is more variable.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.