01
Enter Property Income
Add gross monthly rent, other recurring income and the expected vacancy and credit-loss rate.
Real Estate and Lending
DSCR Calculator
Calculate debt service coverage ratio, net operating income, annual debt service, debt yield, loan-to-value, break-even occupancy and the maximum loan supported by property cash flow.
DSCR target analysis
Rental property income
LTV and debt yield
Property and Loan Details
Enter the property's income, operating expenses, loan structure and lender DSCR target.
Property Coverage Analysis
Review the property's cash flow, debt coverage, leverage and supported borrowing amount.
Debt service coverage ratio
1.25
Meets the entered 1.25 lender target
Net operating income
$0.00
Annual property income after expenses
Annual debt service
$0.00
Annual principal and interest
Effective gross income
$0.00
Total operating expenses
$0.00
Monthly debt payment
$0.00
Cash flow after debt
$0.00
Maximum debt service at target
$0.00
Maximum supported loan
$0.00
Debt yield
0.00%
Loan-to-value ratio
0.00%
Break-even occupancy
0.00%
Operating expense ratio
0.00%
Vacancy loss
$0.00
Management expense
$0.00
DSCR surplus or gap
$0.00
Required NOI at target
$0.00
Balloon balance at maturity
$0.00
Principal paid before maturity
$0.00
The property meets or exceeds the entered lender
DSCR target.
A calculated DSCR does not guarantee financing.
Lenders may apply different vacancy assumptions,
expense adjustments, interest rates, reserves and
underwriting standards.
Property Cash Flow
What Is the Debt Service Coverage Ratio?
DSCR measures whether a property's net operating income is sufficient to cover its annual loan payments.
The debt service coverage ratio compares annual net operating income with annual debt service. Commercial real estate and rental property lenders commonly use this ratio to evaluate property-level repayment ability.
DSCR =
Net Operating Income
÷
Annual Debt Service
A DSCR of 1.00 means property NOI is equal to the annual loan payment. A DSCR above 1.00 indicates additional cash flow remains after debt service, while a ratio below 1.00 indicates that NOI does not fully cover the estimated debt obligation.
For example, a DSCR of 1.25 means annual NOI is approximately 125% of annual debt service. The additional 25% provides a financial cushion for income changes or unexpected expenses.
How It Works
How to Use the DSCR Calculator
Analyse rental property cash flow and debt coverage in four straightforward steps.
02
Add Operating Expenses
Enter maintenance, utilities, taxes, insurance, management and other property operating costs.
03
Enter Debt Service
Calculate debt service from the loan terms or directly enter the expected annual loan payments.
04
Review the Coverage
Compare DSCR, debt yield, LTV, supported loan amount, break-even occupancy and cash flow.
Lending Measurements
Important DSCR Loan Metrics
These measurements help explain property income, leverage, repayment capacity and lender exposure.
Net Operating Income
Effective annual property income after operating expenses but before mortgage payments, depreciation and income taxes.
Annual Debt Service
The total annual principal and interest obligation associated with the property loan.
Debt Yield
Annual NOI divided by the loan amount. Debt yield measures property income relative to lender exposure.
Break-Even Occupancy
The estimated occupancy level needed for property income to cover operating expenses and debt service.
Loan Schedule
DSCR Loan Amortization Preview
Review how early loan payments are divided between principal and interest.
| Payment | Payment Amount | Principal | Interest | Remaining Balance |
|---|
Frequently Asked Questions
DSCR Calculator FAQs
Helpful answers about NOI, annual debt service, debt yield, vacancy and property loan qualification.
DSCR is calculated by dividing annual net operating
income by annual debt service. For example, $125,000 of
NOI divided by $100,000 of annual debt service produces
a DSCR of 1.25.
Requirements vary by lender, loan type, property type
and market. A higher DSCR generally indicates a larger
property cash-flow cushion above annual debt service.
NOI generally includes effective property income minus
ordinary operating expenses such as maintenance,
utilities, management, property taxes and insurance.
Debt payments and income taxes are normally excluded.
No. Mortgage principal and interest are treated as debt
service and should not also be included in the operating
expense inputs.
The calculator first divides NOI by the target DSCR to
estimate maximum annual debt service. It then converts
the supported monthly payment into a loan amount using
the entered interest rate and amortization period.
Debt yield is calculated by dividing annual NOI by the
outstanding loan amount. It measures property cash flow
without relying on the interest rate or amortization
schedule.
A DSCR below 1.00 means the entered net operating income
is lower than the estimated annual debt service. The
property would not generate enough NOI to fully cover
the debt payment under the entered assumptions.
No. Lenders may consider credit, liquidity, reserves,
property condition, appraisal, lease history, market
rents, borrower experience and other underwriting
factors.
Important: This DSCR calculator is
provided for general informational and planning purposes
only. It does not constitute a loan offer, approval,
appraisal, financial advice, accounting advice, tax advice
or legal advice. Actual lender calculations may differ.