Calculate debt service coverage ratios using property income and loan terms to assess deal viability.
The DSCR Calculator estimates the Debt Service Coverage Ratio, a key metric lenders use to assess whether a property’s income is sufficient to cover debt obligations.
Enter Property Income – Input the expected or current Net Operating Income (NOI) for the property.
Enter Loan Terms – Add the proposed loan amount, interest rate, amortization period, and payment frequency.
Calculate Payments – The calculator estimates the annual debt service based on your loan inputs.
View DSCR – The tool divides the property’s income by the annual debt service to produce the DSCR.
Use this calculator to quickly assess deal viability and compare financing scenarios. A DSCR greater than 1.0 means projected income covers debt service; a DSCR below 1.0 indicates that income may not fully cover annual debt obligations.
The Debt Service Coverage Ratio (DSCR) is calculated with a simple ratio:
DSCR = Net Operating Income (NOI) / Annual Debt Service
Where:
Net Operating Income (NOI) is the property’s expected annual income after operating expenses but before debt service.
Annual Debt Service is the total of all required yearly loan payments (principal + interest).
The calculator determines annual debt service using your loan inputs: loan amount, interest rate, amortization, and payment frequency. Then it applies the formula above.
Interpreting DSCR:
DSCR > 1.0 — Income exceeds debt obligations; the property generates a cushion above required payments.
DSCR = 1.0 — Income exactly equals required debt service.
DSCR < 1.0 — Income may not fully cover required debt payments.
Lenders often require a minimum DSCR threshold (e.g., 1.20+) as part of credit approval. This tool helps you test scenarios and better understand risk based on property performance and financing terms.
Debt Service Coverage Ratio (DSCR) measures a property’s ability to cover its debt obligations using operating income. Lenders use it to assess risk and determine whether a deal meets minimum underwriting requirements.
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