DSCR calculator
The debt service coverage ratio a DSCR lender will check, the two common ways to measure it, and the largest loan the rent supports.
Debt service coverage ratio
0
| Monthly rent | $0 |
|---|---|
| Principal and interest | $0 |
| Taxes, insurance and HOA | $0 |
| Monthly PITIA | $0 |
Lenders also look at credit score, reserves, down payment and the appraisal. Each lender defines DSCR in its own guidelines; ask which version it uses.
The DSCR formula
DSCR = Income / Debt payments
A DSCR of 1.25 means the property brings in $1.25 for every $1 of debt payments. Below 1.0, the rent does not cover the loan.
| Version | Income | Payments | Used by |
|---|---|---|---|
| Rent / PITIA | Gross monthly rent | Principal, interest, taxes, insurance, HOA | Most DSCR loans on 1-4 units |
| NOI / debt | Net operating income | Principal and interest | Commercial and portfolio loans |
Example
Rent is $2,500. A $240,000 loan at 7.5 % over 30 years costs $1,678 a month in principal and interest, plus $300 of tax and $125 of insurance: $2,103 of PITIA. DSCR is 2,500 / 2,103 = 1.19. That clears a 1.0 minimum but not 1.25; at 1.25 the same rent supports a loan of about $225,000.
Questions
What is a DSCR loan?
A mortgage for investment property that is approved mainly on the rent the property brings in rather than on your personal income. The lender checks that the rent covers the payment by a set ratio, the debt service coverage ratio.
How do lenders calculate DSCR on a rental?
For one to four units, many DSCR lenders divide the monthly rent (from the lease or the appraiser's rent schedule) by the full monthly payment: principal, interest, property tax, insurance and HOA dues (PITIA). Commercial lenders more often divide net operating income by the loan payments. Ask the lender which version it uses.
What DSCR do I need?
Many DSCR lenders want at least 1.0 to 1.25. Some lend below 1.0 with a larger down payment and a higher rate. A higher ratio usually gets better terms.
How can I raise my DSCR?
Borrow less (a bigger down payment), get a lower rate or a longer amortization, shop for cheaper insurance, or support a higher rent with a signed lease or a strong rent schedule in the appraisal.
Sources
Next steps
Last updated November 5, 2026.