Calculators
DSCR Calculator
Calculate the debt service coverage ratio of a property and the maximum loan that meets a lender's DSCR requirement.
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- Nothing uploaded
The tool
Enter your numbers below. Results update as you type, and nothing leaves your browser.
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What people use it for
- Sizing a commercial or DSCR loan
- Checking whether a property qualifies for refinancing
- Comparing loan terms
- Investor reporting
About this tool
What the DSCR Calculator does
The debt service coverage ratio (DSCR) divides net operating income by annual loan payments. Lenders use it to size commercial and investment property loans: a DSCR of 1.25 means income is 25% more than the debt payments. This calculator also solves for the largest loan that meets a required ratio.
It also works as a commercial mortgage DCR calculator or a debt coverage ratio calculator.
Formula
- DSCR = net operating income ÷ annual debt service
- Maximum debt service = NOI ÷ required DSCR
- Maximum loan = present value of that payment over the amortisation at the loan rate
Worked example
Using the starting values in the calculator above:
| Input | Value |
|---|---|
| Annual net operating income | $120,000 |
| Current annual debt service | $90,000 |
| Lender’s minimum DSCR | 1.25 |
| Loan rate | 7% |
| Amortisation | 25 |
| Result | Value |
|---|---|
| DSCR | 1.33 |
| Maximum loan at required DSCR | $1,131,895 |
| Maximum annual debt service | $96,000 |
| Income above debt service | $30,000 |
How to read the result
Lenders also cap loan-to-value, so the final loan is the smaller of the DSCR-based and value-based amounts.
Lenders usually underwrite NOI themselves, with their own vacancy and expense assumptions; expect their NOI to be lower than the seller’s.
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Questions
Questions about this tool
The things clients actually want to know — costs, timelines, ownership and what happens after launch.
Many lenders require at least 1.2 to 1.35 for commercial property. Below 1.0, income does not cover the debt.
A loan, common for rental investors, sized on the property's rental income rather than the borrower's personal income.
Yes. Debt coverage ratio and debt service coverage ratio describe the same measure.
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