DSCR Loan Calculator

Understanding DSCR Calculations

The Debt Service Coverage Ratio (DSCR) is a key metric used by lenders to evaluate investment property loans. It measures a property's ability to cover its debt payments from its net operating income.

How DSCR is Calculated

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

• Net Operating Income (NOI): Rental income minus operating expenses
• Total Debt Service: Monthly mortgage payments (principal and interest)

DSCR Ratings Explained

• 1.5 or higher: Excellent - Strong cash flow position
• 1.25 to 1.49: Good - Healthy cash flow
• 1.0 to 1.24: Fair - Breaking even
• Below 1.0: Poor - Negative cash flow