Debt Service Coverage Ratio (DSCR) Calculator

See your DSCR, lender qualification tier, and the maximum loan the property supports — instantly.

Property & Loan

Quick presets

Gross Income

Op. Expenses

Total Loan Amount

Interest Rate

Term (Years)

Payment Frequency

Interest-Only period Compare debt service with no principal amortization

Lender Qualification 1.25x is the conventional prime threshold

Max Loan @ 1.25x $0.00

Net Cash Flow $0.00

Annual Debt Service $0.00

What is Debt Service Coverage Ratio (DSCR)?

The Debt Service Coverage Ratio (DSCR) is a key financial metric used by commercial banks, private lenders, and real estate investors to measure an income-producing property's capacity to cover its total debt obligations.

Unlike residential consumer mortgages that evaluate a borrower's personal debt-to-income (DTI) ratio and tax returns, DSCR loans evaluate the financial health and cash flow generation of the subject real estate asset itself.

The Mathematical DSCR Formula

DSCR = Net Operating Income (NOI) / Total Debt Service (TDS)

Where:

Net Operating Income (NOI): Gross Income − Operating Expenses. (Operating expenses include property taxes, hazard insurance, repairs, HOA dues, and property management fees. Mortgage principal and interest are excluded from operating expenses.)
Total Debt Service (TDS): Total periodic scheduled debt payments amortized over the loan term — or interest only, if an interest-only period is selected.

Maximum Loan at a 1.25x DSCR

Lenders frequently size a loan backwards from the coverage ratio they require rather than forwards from a requested amount. At the conventional 1.25x threshold, the maximum periodic debt service a property can support is its NOI divided by 1.25 — and the loan amount follows from that payment, the interest rate, and the amortization term.

The Max Loan @ 1.25x figure in the results panel applies exactly that inversion to the rate, term, and payment frequency you entered, so it moves with the interest-only toggle too. Interest-only debt service is lower for the same principal, which is why an interest-only structure supports a materially larger loan at the same coverage ratio — and also why lenders underwrite the eventual amortizing payment, not the introductory one.

What is Considered a "Good" DSCR Ratio?

Commercial lenders and private real estate debt funds classify DSCR metrics into standardized risk tiers:

DSCR Range	Underwriting Status	Financial Meaning
< 1.00x	Negative Cash Flow	The property generates insufficient income to cover debt payments. The borrower must pay out of pocket to avoid default.
1.00x – 1.24x	Marginal / Tight	The property breaks even or has a razor-thin cash cushion. Lenders usually require larger down payments, additional cash reserves, or personal guarantees.
1.25x – 1.49x	Standard / Prime	The typical minimum threshold for conventional commercial mortgages and standard non-QM DSCR loan programs, providing a 25% safety margin.
≥ 1.50x	Strong / Low Risk	High cash flow buffer with superior risk protection. Investors may qualify for optimal interest rates and higher loan-to-value (LTV) limits.

Assumptions & Scope Notes

This calculator uses standard amortization payment formulas:

Fully Amortizing Loans: Computes standard periodic debt service over the amortized lifespan.
Interest-Only: When toggled, debt service is the periodic interest charge alone. Real interest-only loans convert to amortizing later; lenders typically qualify on the amortizing payment, so treat the interest-only DSCR as a cash-flow view rather than an approval figure.
Specialized Edge Cases: Balloon payment maturities and portfolio-blended DSCR require customized loan schedules not modeled here.