DSCR Calculator
Calculate a rental property's Debt Service Coverage Ratio (DSCR) from its monthly rental income, operating expenses, and mortgage payment - the key ratio DSCR loan lenders use to qualify investment properties.
Net Operating Income (monthly)
$2,100.00
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Pro Tips
- •DSCR = Net Operating Income / Total Debt Service - a ratio of 1.0 means the property's income exactly covers its debt payment, with nothing left over
- •Most DSCR loan programs look for a minimum ratio between 1.0 and 1.25, though exact requirements vary by lender
- •Operating expenses typically include property taxes, insurance, HOA fees, and maintenance reserves - but not the mortgage payment itself, which is factored in separately as debt service
- •A higher DSCR generally qualifies for better loan pricing and terms, since it signals more cushion if rent drops or expenses rise
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Most real estate investors calculate DSCR using projected market rent and the estimated mortgage payment before finalizing a purchase offer
When to Use This Tool
Check whether a rental property's cash flow meets a lender's minimum DSCR requirement before applying.
Assess whether a potential investment property generates enough income to comfortably cover its financing.
Compare the DSCR of multiple properties to identify which offers the strongest cash flow cushion.
Estimate DSCR at a new interest rate or loan amount before refinancing.
How It Works
Subtract monthly operating expenses from monthly rental income to calculate Net Operating Income (NOI)
Divide NOI by the monthly mortgage payment (principal and interest) to calculate the DSCR
Compare the resulting ratio against typical DSCR lender minimums to gauge likely qualification
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Frequently Asked Questions
What is a DSCR loan?
A DSCR (Debt Service Coverage Ratio) loan is a type of investment property financing that qualifies borrowers based on the property's rental income relative to its debt payment, rather than the borrower's personal income - common for real estate investors.
What DSCR ratio do I need to qualify?
It varies by lender, but most DSCR loan programs look for a minimum ratio somewhere between 1.0 and 1.25. A ratio below 1.0 means the property doesn't fully cover its own debt payment, which most lenders view unfavorably.
What counts as an operating expense in this calculation?
Typically property taxes, insurance, HOA dues, and a maintenance/vacancy reserve. The mortgage principal and interest payment is not included here - it's entered separately as the debt service figure.
Should I use actual rent or market rent?
Lenders often use the lesser of actual lease rent or an appraiser's market rent estimate. If you're evaluating a purchase, using a conservative market rent estimate gives a more realistic picture.
Is my data sent to a server?
No. All calculations happen entirely in your browser using JavaScript.