DSCR Loan Calculator
Enter your rental income, loan amount, and monthly expenses to instantly see your Debt Service Coverage Ratio and whether the deal qualifies for DSCR financing.
DSCR Calculator
Monthly rental income
$
Loan amount
$
Interest rate
%
Loan term
years
Monthly taxes
$
Monthly insurance
$
Monthly HOA
$
Monthly principal + interest
$2,307
Total PITI
$2,707
DSCR
1.11
How DSCR is calculated
DSCR stands for Debt Service Coverage Ratio. It measures whether a rental property generates enough income to cover its mortgage payment. The formula is simple:
PITI stands for principal, interest, taxes, and insurance — plus any monthly HOA dues. A DSCR of 1.0 means rent exactly covers the monthly debt service. A DSCR of 1.25 means rent is 25% higher than the monthly payment, giving the lender a comfortable margin.
What DSCR do lenders require?
Most DSCR lenders require a minimum ratio of 1.0 to fund a loan, but pricing improves meaningfully at 1.20 and again at 1.25. Above 1.25, you’re typically in the best-pricing tier. Below 1.0, your options narrow but don’t disappear — several lenders will fund sub-1.0 DSCR deals for strong borrowers, though rates will be higher and LTV caps tighter.
The three tiers this calculator shows map to how most DSCR lenders price deals: premium (1.25+), standard (1.0–1.24), and challenged (below 1.0).
How to improve your DSCR
Three levers move your DSCR: increase rent, reduce the loan amount, or lower the interest rate. In practice, the easiest lever is the loan amount — putting more money down directly increases your ratio. Each $10,000 reduction in loan amount typically adds 0.02–0.04 to DSCR depending on the rate.
If the deal won’t pencil at your target DSCR, consider: negotiating the purchase price down, using a 10-year interest-only product (lower monthly payment), or holding out for a lower-rate environment.
Frequently asked questions
What DSCR do I need to qualify for a loan?
Most DSCR lenders require a minimum ratio of 1.0, meaning rent must at least cover the monthly mortgage payment. Premium pricing typically starts at 1.20–1.25. Some lenders will still fund below 1.0 for strong borrowers, but expect higher rates and tighter LTV caps.
How is DSCR calculated?
DSCR equals gross monthly rental income divided by total monthly debt service (principal, interest, taxes, insurance, and HOA). A DSCR of 1.20 means rent is 20% higher than the monthly mortgage payment.
Should I use gross rent or net rent in the calculation?
DSCR uses gross rent — the full monthly rent collected before expenses like vacancy, maintenance, or management fees. Some lenders apply a vacancy factor (often 5–10%), but the standard industry definition uses gross rent.
What counts in the monthly PITI?
PITI stands for principal, interest, taxes, and insurance. Most lenders also include monthly HOA dues if the property has them. Utilities and management fees are not included.
Get real DSCR quotes on your deal
This calculator shows your ratio. Get My Terms shows you real quotes from multiple DSCR lenders based on your specific scenario — in seconds, for free.
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