DSCR Calculator: Debt Service Coverage Ratio for Rental Loans
Calculate the DSCR of a rental property loan, rent ÷ PITIA and NOI ÷ debt service, and the maximum loan a lender allows at a DSCR of 1.0 to 1.5.
| DSCR | Maximum loan |
|---|
DSCR loans for rental property usually divide the monthly rent by the full payment (principal, interest, taxes, insurance and HOA: PITIA); commercial lenders divide the NOI by the yearly debt service. Lenders often ask for 1.0 to 1.25 and a down payment of 20% to 25%.
What it does
The debt service coverage ratio shows how many times the property's income covers the loan payment. DSCR loans approve rental property on the rent instead of your personal income, so the ratio decides how much you can borrow. The calculator gives the ratio, whether it passes and the largest loan at each level.
How to use it
- Type the monthly rent, the property tax, insurance and HOA.
- Type the loan amount, rate and term, and the DSCR the lender requires.
- See the DSCR, whether it passes and the maximum loan at each ratio.
The arithmetic runs in your browser. Nothing you type is sent anywhere and nothing is stored, so you can use these with real numbers.
Frequently asked questions
How is DSCR calculated?
Rent ÷ PITIA. With 2,500 of rent and a 240,000 loan at 7.5% (1,678.11) plus 425 of taxes and insurance, the PITIA is 2,103.11 and the DSCR is 1.19.
How much can I borrow with a DSCR loan?
The loan whose PITIA is the rent ÷ the required DSCR. At 1.25 the example allows 225,253; at 1.0, 296,762.
What DSCR do lenders require?
Most DSCR lenders want at least 1.0 to 1.25; below 1.0 the rent does not cover the payment and the rate or the down payment goes up. In the example the rent would have to be 2,629 for a DSCR of 1.25.
🏘️ Rental Property Calculator: Cash Flow, Cap Rate and Cash-on-Cash Return
📊 Cap Rate Calculator
🏠 Mortgage Calculator
🏡 House Affordability Calculator