Calculators / DSCR Loan Calculator
Investor loans · rent ÷ PITIA

DSCR Loan Calculator

DSCR loans qualify you on the property's rent instead of your personal income. Check your ratio the way most DSCR lenders calculate it, the rent needed to qualify, and the largest loan the rent supports. The figures below are an example.

Loan
Property
Lender
Example figures shown. Results update as you type.
DSCR––
Loan amount
–
Principal & interest
–
PITIA / mo
–
Rent minus PITIA
–
Rent needed for 1.00
–
Rent needed for target
–
Max loan at target DSCR
–

Most DSCR lenders divide gross monthly rent by PITIA (principal, interest, taxes, insurance and HOA). Some use NOI instead; check with your lender.

What is DSCR?

The debt service coverage ratio tells a lender whether a property's income can cover its loan payment. For residential DSCR loans, most lenders use a simple version: gross monthly rent divided by the full monthly housing payment, known as PITIA.

DSCR = Monthly rent ÷ (Principal + Interest + Taxes + Insurance + HOA)

A DSCR of 1.00 means rent exactly covers the payment. 1.25 means rent is 25% higher than the payment, which leaves room for vacancy and repairs.

What DSCR do lenders require?

Many lenders look for 1.20–1.25 for their best rates. Some offer loans at 1.00, and a few go below 1.0 with larger down payments and higher rates. Requirements change often, so treat the target in this calculator as a starting point and confirm with a lender.

How to raise your DSCR

  • Increase the down payment to shrink the loan.
  • Buy down the interest rate with points.
  • Choose an interest-only period if the lender offers one.
  • Shop insurance, which is often the easiest expense to lower.
  • Support a higher rent with a signed lease or a market rent appraisal.

DSCR in commercial lending

Commercial lenders usually calculate DSCR from net operating income (rent minus all operating expenses) divided by annual debt service. That version is stricter. Use the rental property calculator to see DSCR on an NOI basis.

Frequently asked questions

What is a DSCR loan?

A DSCR loan is an investment property mortgage that qualifies you based on the property's rental income instead of your personal income, tax returns or employment. It is popular with self-employed investors and those with many properties.

What is a good DSCR ratio?

1.25 or higher is considered strong. 1.0 means the rent only just covers the payment. Below 1.0 the property needs money from you every month.

What rent do lenders use for DSCR?

Usually the lower of the current lease and the market rent from the appraiser's rent schedule (Form 1007). For short-term rentals, some lenders use 12 months of booking history or an AirDNA estimate.

Does DSCR include vacancy and maintenance?

The lender-style DSCR on this page does not. It is rent divided by PITIA only. That is why a DSCR around 1.0 can still mean negative real cash flow once you add repairs and vacancy.