Tiny Toolkit

DSCR Calculator

DSCR (Debt Service Coverage Ratio) is the single most important metric for investment property lenders — it tells them whether the property's income is enough to cover the loan payments. Enter annual NOI and annual debt service to see the ratio instantly, with color-coded feedback showing whether you meet the common 1.25x lender threshold. Use this before applying for a DSCR loan to forecast qualification.

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Frequently Asked Questions

What is DSCR and why do lenders care about it?
DSCR (Debt Service Coverage Ratio) measures how much income a property generates relative to its debt obligations. A 1.25 DSCR means the property produces $1.25 of income for every $1.00 of debt payments. Lenders use it to assess risk: if income drops, can the property still cover the loan?
What DSCR is required to qualify for a loan?
Most conventional investment property lenders and DSCR-specific lenders require a minimum of 1.20–1.25. Some lenders will go as low as 1.0 or even 0.75 for strong borrowers, but rates and terms will be worse below 1.25.
What is included in 'annual debt service'?
Annual debt service is the total of all principal and interest payments on the loan(s) secured by the property over a 12-month period. It does not include taxes, insurance, or maintenance; those are expenses factored into NOI on the other side of the equation.
How do I calculate NOI?
NOI (Net Operating Income) = Gross Rental Income − Vacancy Allowance − Operating Expenses. Operating expenses include property taxes, insurance, maintenance, management fees, and utilities paid by the landlord, but not mortgage payments.

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What Is DSCR and Why Do Lenders Use It?

DSCR (Debt Service Coverage Ratio) is the key metric lenders use to qualify investment property loans. Here's what it means, how to calculate it, and how to improve it.

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