DSCR Calculator (Debt Service Coverage Ratio)

How it works

DSCR = net operating income ÷ annual debt service. Debt service is twelve times the monthly loan payment, P × r ÷ (1 − (1 + r)^−n). Lenders on investment properties often ask for 1.20 to 1.25 or more. The largest loan = (NOI ÷ minimum DSCR) ÷ annual payment per dollar borrowed, so it shows how much debt the income can carry. Example: A property with $60,000 of NOI and a $600,000 loan at 7 percent over 25 years has debt service of $50,888.10 a year, so DSCR is 1.18. At a 1.25 minimum, the largest loan is about $565,947.61.

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