DSCR Loan Calculator: Debt Service Coverage Ratio
This DSCR loan calculator compares NOI or lender-accepted rent coverage with a target ratio, payment and hypothetical loan; the result isn't an approval.
What This Calculator Does
See how far a rental's income stretches to cover its loan payment under the coverage definition you pick. The NOI method divides net operating income by principal and interest. The accepted-rent method divides lender-accepted rent by principal and interest plus the housing costs the program counts. Add a target and the note's rate and term, and you get the largest principal that coverage alone supports. That figure isn't an approved loan, and it isn't a limit every lender applies.
Who Is This For
It's meant for real estate investors and real estate professionals who want to run a defined coverage scenario with the rent, cost categories and terms their lender supplies. Confirm which program applies outside the tool. Borrower eligibility, property value, leverage and reserves are checked separately.
How It Works
Start by choosing a method. For NOI, enter scheduled rent, a vacancy allowance and all operating expenses. For PITIA, put in the rent figure your lender has accepted, and list property taxes, mandatory insurance and HOA dues in their own fields. Next come the loan amount, an annual fixed rate, the term and your target, such as 1.35. The loan can be 0, but the rate and term are still required, since the tool uses them to estimate the largest supported loan. After that, compare the outcome with your target, with the payment the income can carry (it may come out negative) and with the largest supported loan.
Frequently Asked Questions
Why choose the coverage method before entering rent?
Because the methods divide different rents by different payments. NOI takes scheduled rent, subtracts vacancy and operating costs, and divides the result by principal and interest alone. PITIA starts from the qualifying rent your lender has already accepted and divides it by the full housing payment: principal and interest, taxes, insurance and HOA dues. Scheduled, collected and lender-accepted rent differ. Switching methods won't make your rent lender-accepted, nor will it reclassify operating expenses as housing costs.
Can the same inputs pass under NOI and fail under accepted rent?
Yes. Say the rent is $4,000, vacancy runs 5% and costs are $900, with a $320,000 loan at an assumed 7% for 30 years. Operating income works out to $2,900 and principal and interest come to about $2,128.97, so the DSCR is about 1.3622×, which clears a 1.35× target. Now picture a program that accepts the same $4,000 rent and treats that $900 as actual taxes, insurance and HOA dues: the divisor becomes $3,028.97 and coverage drops to about 1.3206×, under 1.35×. The maximum loan here is about $322,882.92 under NOI versus about $310,078.95 under accepted rent. Neither result approves financing.
Does the calculator choose the qualifying rent or cut it down?
No. In accepted-rent mode you type in the monthly qualifying rent your program has accepted. The tool doesn't choose between the lease and the appraisal, doesn't apply an undocumented program cut, doesn't decide eligibility and doesn't take vacancy off that rent again. NOI mode works differently: you enter gross scheduled rent and state the vacancy and collection allowance yourself. Each definition has its own rent basis, so don't carry a net or gross figure across from the other without confirming it first.
Which costs belong in the housing-cost fields?
Monthly taxes, association dues or assessments, and required insurance, as your program documents them. Principal and interest stay out. The calculator already models them. Repairs, management fees and lumped operating totals don't become housing costs automatically. In NOI mode there's no separate housing bucket: every expense goes into the NOI figure, following a convention you confirm outside the tool. A grayed-out field simply doesn't apply; it isn't a confirmed zero. Count each cost once, and check how your lender classifies it.
What happens if you enter a loan of zero?
With the loan set to 0, principal and interest drop to 0 too. In NOI mode that leaves nothing to divide by, so no DSCR appears, although the maximum supported loan may still be positive. PITIA mode works differently. A DSCR can still show there if the other housing costs are positive: with accepted rent of $4,000 and $900 in costs, that 0 loan gives about 4.4444×. If there are no housing costs either, no ratio appears. Keep the rate and term filled in, because the tool still calculates the maximum supported loan. A loan of 0 doesn't mean a cash purchase or an approval.
Can I meet my target and still find no loan fits?
Yes. Suppose accepted rent is $1,250 and fixed costs are $1,000, the loan is 0 and the target is 1.25×: the DSCR lands exactly on 1.25×. The payment the income can carry is $1,250/1.25−$1,000=0, and the largest loan it supports is also 0. Now try accepted rent of $1,000 against fixed costs of $1,500 at the same 1.25× target. The supported payment comes out at −$700, and the calculator keeps showing that negative figure; the maximum loan is 0 because costs swallow the income. Once operating income stops being positive, no loan is supported. These examples are illustrations, not program quotes.
What do the target and the maximum-loan figure represent?
Think of the target as a ratio, never a percent. A target of 1.35 means income comes to 1.35 times the payment. The form takes values in the 0.8–2 range, a cap set by the form, not by law or any lender standard. Set it below 1 and loan payments may exceed income. To find the supported payment, divide income by the target and, where fixed housing costs apply, subtract them; if what remains is positive, the rate and term convert it into a principal amount. Read the result as a coverage view only. It ignores property value, LTV and credit. Reserves, down payment and the program's loan caps are outside it too. The field limits don't cap outputs.
How precise is the result, and which loan type does it assume?
Amounts keep their cents. Vacancy, rate and target accept up to four decimal places. Exact payments, never a lender's rounded statement, decide whether the target is met and set the supported payment and the maximum loan, so a DSCR displayed as 1.35× that actually equals 1.34999 misses a 1.35× target. Annual income and annual payments are simply the monthly figures multiplied by 12. That makes the ratio neither a yearly return nor a multi-year projection. The model handles standard fixed-rate loans only. The note rate is neither an APR nor a market quote, and the math leaves out income taxes and investment return.