A DSCR Calculator (Debt Service Coverage Ratio Calculator) helps real estate investors and lenders evaluate whether a property generates enough rental income to cover its debt payments. This tool is critical in real estate financing, especially for investment properties, commercial loans, and non-QM mortgage programs.
Lenders use DSCR to evaluate risk and determine loan eligibility. The higher your DSCR, the more likely you are to qualify for favorable terms. Many lenders require a minimum DSCR of 1.20 or higher for investment property loans.
Our DSCR (Debt Service Coverage Ratio) Calculator is designed specifically for real estate investors, lenders, and analysts who need quick and accurate insights into a property’s income-to-debt relationship. Key features include:
✅ Real-time DSCR calculation as you enter values
✅ Loan-to-Value (LTV) calculation based on down payment
✅ Monthly P&I and total payment calculation
✅ Support for interest-only loan options
✅ Fields for taxes, insurance, and HOA fees
✅ Clear, simple layout for fast decision-making
✅ Mobile-friendly and easy to use on any device
The calculator measures a property’s ability to cover its debt with rental income. This is especially important in:
Investment property purchases
Commercial real estate loans
Business lending decisions
Non-QM mortgage evaluations
🔍 Pre-purchase analysis to assess if a property cash flows
📋 Loan qualification for DSCR-based mortgages
🔄 Refinancing decisions for current property holdings
🧮 Portfolio planning to prioritize profitable investments
🏦 Lender due diligence to evaluate borrower risk
| DSCR Value | What It Indicates | Risk Level |
|---|---|---|
| Below 1.0 | Negative cash flow — income is not enough | 🔴 High Risk |
| 1.00– 1.10 | Break-even or marginal coverage | 🟠 Moderate Risk |
| 1.20+ | Positive cash flow — healthy margin | 🟢 Low Risk |
| 1.50+ | Strong coverage — very attractive to lenders | ✅ Very Low Risk |
DSCR > 1.25 is considered strong and safe by most lenders.
DSCR < 1.0 is considered high risk because the property does not generate enough income to cover the debt.
Some lenders may allow a DSCR as low as 0.75–1.00 if the borrower has strong reserves or additional income.
Here’s a quick explanation of the key fields used in the calculator:
Gross Rental Income: The total monthly rent before expenses.
Price/Value: The property’s purchase or current market value.
Down Payment %: The percentage of the value you’ll put down.
Loan Amount: Automatically calculated from the price and down payment.
Interest Rate: The annual loan interest rate.
Loan Term: The length of the loan, typically 15 or 30 years.
Interest-Only Option: Whether you’re paying just interest, no principal.
Taxes/Insurance/HOA: Monthly costs that factor into total debt service.
Total Monthly Payment: The full amount you pay monthly including all expenses.
DSCR: The ratio of rental income to total monthly debt service.
Saves time vs. doing manual calculations
Gives you clarity on cash flow and debt coverage
Helps move quickly on deals with clear profitability
Improves communication with lenders and partners
Helps avoid risky investments before you commit
DSCR (Debt Service Coverage Ratio) is a financial metric that compares a property's monthly rental income to its monthly debt obligations. It helps determine whether a property generates enough income to cover its expenses.
DSCR = Gross Rental Income / Total Monthly Debt Service (loan payment + taxes + insurance + HOA fees)
Some lenders allow DSCRs as low as 0.75–1.0, but you may need strong reserves or other income to qualify.
It means your rental income is just enough to cover your debt payments — no profit, no loss.
Typically, gross monthly rental income is used. Some lenders may allow projected market rents based on an appraisal.
Some lenders allow DSCR calculations using short-term rental income, especially if documented with tax returns or platform statements.
Yes, our DSCR Calculator includes fields for property taxes, insurance, and HOA fees to provide an accurate monthly debt service.
Absolutely! The calculator is mobile-friendly and responsive for use on phones and tablets.
No — it’s completely free and requires no sign-up or login.
At a minimum, before purchasing, refinancing, or annually to monitor your investment performance.
No. DSCR is a ratio. Cash flow is the actual profit left after expenses.
It helps investors make fast, informed decisions and avoid buying properties that will lose money.
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