DSCR Calculator
Calculate the debt service coverage ratio from net operating income and annual debt service, with a clear rating. Free and accurate.
Independently verified for accuracy
Calculator by Toolsloft ↗- DSCR
- 1.33
- Rating
- Strong
This calculator returns the debt service coverage ratio, the figure lenders use to judge whether a property's income covers its debt. Enter the annual net operating income and the annual debt service to see the ratio and a plain rating. Use it before applying for a commercial or rental property loan to know where you stand.
How this is calculated
It divides net operating income by annual debt service: DSCR = NOI / Annual Debt Service. A ratio of 1.0 means income exactly covers the loan payments. The rating bands follow standard commercial lending practice, where 1.25 and above is treated as strong and below 1.0 means income falls short of the debt.
How to use
- Enter the annual net operating income.
- Enter the annual debt service (total loan payments for the year).
- Read the DSCR and its rating.
Examples
- $120,000 NOI / $90,000 debt service:
DSCR 1.33 (Strong) - Income below debt:
$50,000 / $60,000 → DSCR 0.83 (Below 1.0)
FAQ
- How is DSCR calculated?
- DSCR = Net Operating Income ÷ Annual Debt Service. A result of 1.0 means the property earns exactly enough to cover its yearly loan payments.
- What DSCR do lenders want?
- Most commercial lenders look for 1.25 or higher. A ratio below 1.0 means income does not cover the debt, which makes approval difficult.
- What counts as annual debt service?
- The total of all principal and interest payments on the loan for one year.