Build effective income
Monthly rent and other income are annualized to gross scheduled income. The entered vacancy rate reduces that total to effective gross income.
Debt coverage
DSCR Calculator
Calculate current DSCR, then estimate maximum debt service and loan amount from NOI, a Target DSCR, interest rate, and loan term.
Decision question
What is the current DSCR, and how much debt can this NOI support?
This calculator provides estimates and educational information for planning and comparison, not financial, investment, tax, legal, lending, or real estate advice.
Coverage memo
Follow property income through annual debt coverage
DSCR separates property operations from financing. Build NOI first, calculate the loan payment separately, then compare the two annual amounts.
Primary formula
Current DSCR = NOI ÷ Current Annual Debt Service
Annual debt service is the modeled monthly principal-and-interest payment × 12. Target DSCR does not change this current-loan calculation.
Reverse sizing formula
Maximum Annual Debt Service = NOI ÷ Target DSCR
The supported monthly payment is annual debt service ÷ 12. The calculator then solves the fixed-rate amortization formula for principal.
Separate operations from financing
Taxes, insurance, HOA fees, utilities, management, maintenance, and other recurring costs reduce NOI. The mortgage payment is calculated afterward as debt service.
Read the result in context
A ratio above 1.00x means modeled NOI exceeds modeled debt service; below 1.00x means it does not. Lender requirements still depend on the loan program, property, market, and underwriting rules.
Current DSCR vs Target DSCR
Current DSCR measures the entered loan. Target DSCR is a separate sizing assumption that limits supported debt service. Raising the target reduces the payment and principal supported by the same NOI.
Rate and lender assumptions matter
A higher rate supports less principal at the same payment. This estimate uses monthly, fixed-rate, fully amortizing principal and interest; a lender may use different income, expenses, reserves, amortization, or underwriting standards.
Worked example
Size a maximum loan from property NOI
Every result below is generated by the same production NOI and reverse-amortization functions used in the calculator.
Submitted assumptions
- Property NOI
- $32,239
- Target DSCR
- 1.25x
- Interest rate
- 6.5%
- Loan term
- 30 years
Production-formula result
$32,239 NOI ÷ 1.25x supports $25,791 of annual debt service, or $2,149 per month. At 6.5% for 30 years, that payment supports an estimated maximum loan of $340,039.
Learn more about how to calculate DSCR and the fixed-rate mortgage payment formula.
Learn the method
Related Guides
- MethodHow to Calculate DSCR for a Rental PropertyCalculate property-level DSCR, required NOI, and sensitivity to vacancy, expenses, rate, and loan terms.
- ExampleDSCR Calculation Example for a Rental PropertyBuild property-level debt coverage, reverse an illustrative target, and stress the proposed rate.
- ComparisonDSCR vs. Loan-to-Value: How the Two Lending Metrics DifferCalculate DSCR and LTV for two scenarios, then raise vacancy to show why only the coverage ratio changes.
Questions
About the DSCR Calculator
Debt service coverage ratio compares projected net operating income with modeled annual debt service. It shows how much property-level NOI is available relative to the principal-and-interest payments in this scenario.
It annualizes rental and other income, subtracts vacancy loss, then subtracts property taxes, insurance, HOA fees, utilities, other expenses, property management, and maintenance. Mortgage payments are excluded from NOI.
For this calculator, 1.25x or more is labeled strong coverage, 1.00x through 1.24x is labeled tight coverage, and below 1.00x is labeled insufficient coverage. These labels are scenario signposts, not lender approval standards; requirements and underwriting adjustments vary.
No. In this model, annual debt service is the calculated monthly principal-and-interest payment multiplied by 12. Property taxes and insurance are treated as operating expenses that reduce NOI.
DSCR is shown as unavailable when modeled annual debt service is zero, because the ratio cannot divide NOI by zero. The NOI and operating-expense results remain available for review.
Target DSCR is the minimum NOI-to-debt-service ratio used for the reverse loan-sizing estimate. It is separate from current DSCR, which uses the loan amount entered in the form.
The calculator divides NOI by Target DSCR to estimate maximum annual debt service, converts that to a monthly payment, and solves the fixed-rate amortization formula for principal. The result is an estimate, not an underwriting approval.
A higher Target DSCR requires more NOI for every dollar of debt service. That lowers the supported monthly payment and, with the same interest rate and term, lowers the maximum supported principal.
At the same supported monthly debt service and loan term, a higher interest rate directs more of each payment to interest and therefore supports less principal. The sensitivity table compares nearby rate and Target DSCR assumptions.