Start with the income
Enter annual gross rental income. Add operating expenses as a total, or use the itemized breakdown for taxes, insurance, maintenance, management and vacancy.
The rental property decision toolkit
DSCR CalculatorKnow what your rental can carry.
Turn rental income and loan terms into a clear picture of debt coverage, cash flow and estimated borrowing capacity.
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01 / Calculate
Your property. Your numbers.
Enter annual income and expenses, then your loan details. Blank income and loan fields use the labeled example; blank expenses use an editable estimate.
—DSCR
Example
Enter your numbers
Debt Service Coverage Ratio = net operating income ÷ annual debt service.
Below 1.00 · Shortfall1.00–1.24 · Marginal1.25–1.49 · Prime1.50+ · Strong
- Net operating income
- —
- per year
- Annual debt service
- —
- per year
- Net cash flow
- —
- per year
- Max loan at target DSCR
- —
Sensitivity
| Loan amount, interest rate | −2% | Your rate | +2% |
|---|---|---|---|
| Loan −10% | — | — | — |
| Your loan | — | — | — |
| Loan +10% | — | — | — |
Note. Results are informational estimates only and do not constitute financial advice or a loan offer. Balloon payments, blended portfolios and lender-specific requirements are not modeled. Confirm qualification with your lender.
This tool uses net operating income ÷ debt service. Residential DSCR mortgage programs may instead use rent ÷ PITIA. The methods differ, and a calculator result does not confirm loan approval. Compare the methods →
02 / Get started
From inputs to insight in three steps.
Add your financing
Enter the loan amount, annual interest rate and amortization term. Advanced options let you change payment frequency or model interest-only payments.
Explore the tradeoffs
Read your coverage and cash flow, choose a target ratio, and compare rate scenarios. Copy, share or save a PDF of the calculation.
03 / Understand
What does your DSCR tell you?
DSCR measures the income available for each unit of debt service. These ranges describe this calculator’s coverage bands, not universal lender eligibility rules.
Income shortfall
Operating income does not cover modeled debt service. At 0.90, there is $0.90 available for every $1 owed.
Limited cushion
At 1.00, operating income exactly covers debt service. Above that, there is a cushion, but unexpected costs can narrow it.
More breathing room
At 1.25, operating income is 25% above modeled debt service. Check the assumptions behind that cushion.
Stronger coverage
At 1.50, there is $1.50 of operating income for each $1 of debt service. Other property and financing risks still matter.
04 / The methodology
How DSCR is calculated.
Debt service coverage ratio compares income available before loan payments with the payments themselves. Keep the numerator and denominator in the same time period.
DSCRNet operating incomeAnnual debt service
Example: $62,400 ÷ $48,665 ≈ 1.28.
Net operating income (NOI)
Annual gross income minus operating expenses. In this calculator, itemized vacancy and management are percentages of gross income. Debt payments are excluded from operating expenses.
Annual debt service
The modeled principal-and-interest payment multiplied by payments per year. Interest-only mode includes interest without principal amortization.
Estimated loan capacity
The loan supported by NOI at your chosen target, rate and term. This is a mathematical estimate before loan-to-value limits, reserves, fees and lender rules.
05 / A worked example
A DSCR calculation example.
Consider $96,000 of annual rent and $33,600 in operating expenses. A $580,000 loan at 7.5%, amortized over 30 years with monthly payments, produces the estimates shown here.
1.28×
Try these numbers in the calculator ↑Approximately $1.28 of operating income for each $1 of debt service.
| Gross rental income | $96,000 |
|---|---|
| Operating expenses | −$33,600 |
| Net operating income | $62,400 |
| Annual debt service | ≈ $48,665 |
| Cash flow after debt service | ≈ $13,735 |
| Loan capacity at 1.25 DSCR | ≈ $594,953 |
Rounded estimates. Capacity is based on the stated rate and term, not a financing offer.
06 / Explore your options
How to improve your DSCR.
Change the income assumptions
Compare realistic rent and vacancy scenarios. Higher income improves coverage only if it can be sustained; do not assume full occupancy by default.
Review operating costs
Use actual taxes, insurance and management costs where possible. Compare efficient operations without removing necessary maintenance from the budget.
Compare loan structures
A smaller loan or lower rate can reduce debt service. Longer amortization and interest-only payments change cash flow and risks; compare the full terms.
07 / Know the difference
NOI-based DSCR vs. rent-to-PITIA.
Two calculations can use the same DSCR name and produce different answers. Ask which method a lender uses before comparing your result with its criteria.
NOI ÷ debt service
Subtract operating costs from income, then divide by principal and interest payments. Taxes and insurance belong in operating expenses here.
$62,400 ÷ $48,665 ≈ 1.28Monthly rent ÷ PITIA
Compare monthly rent with principal, interest, taxes, insurance and association dues. This is a different underwriting calculation and is not the current mode of this tool.
Illustration: $2,500 ÷ $2,000 = 1.25Avoid subtracting taxes and insurance from income and also counting the same amounts in debt service.
08 / Common questions
DSCR calculator FAQs.
Understand the inputs, the output and the limits before relying on a ratio.
How is DSCR calculated?
This calculator divides annual net operating income by annual modeled debt service. Enter income and expenses for a full year. Loan terms are used to calculate principal and interest payments.
What does a DSCR of 1.25 mean?
It means modeled operating income is 1.25 times modeled debt service, or 25% above it. It does not mean a 25% investment return or guarantee loan approval.
Which expenses should I include?
Include operating costs such as property taxes, insurance, maintenance, HOA dues and management. You can account for vacancy in the breakdown. Exclude principal and interest because the calculator models those separately.
Why does my lender show a different result?
A lender may use rent divided by PITIA, adjust eligible rental income, or apply its own expense assumptions. Confirm the calculation method and program rules instead of comparing ratios with different inputs.
How do vacancy and interest-only payments affect DSCR?
Vacancy reduces available operating income and coverage. Interest-only payments omit principal during the modeled period and can raise the ratio, but future amortization or balloon obligations are not modeled.
Is the maximum loan amount a preapproval?
No. It is the loan mathematically supported by the entered NOI, target, interest rate and term. Actual financing can also depend on property value, credit, reserves and lender criteria.
Does changing the currency convert my amounts?
No. The currency selector changes formatting and symbols only. Enter all monetary amounts in the same currency.
Do I need to register or share my email?
No signup is needed to calculate or generate a PDF. Calculations run in your browser. If the site enables a follow-up form, submitting it stores the details described by that form.
Built on transparent calculations
Check the method. Know the limits.
This tool models a constant interest rate and the selected payment frequency. It excludes lender fees, changing rates, balloon payments, future rent changes and tax effects. Expense presets are editable illustrations, not market research.
Further reading
Fannie Mae: DSCR examples ↗Visio Lending: residential DSCR method ↗These references explain different DSCR contexts. They do not endorse this tool. Check current program rules directly with a lender.
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