DSCR Calculator

What is DSCR?

Debt Service Coverage Ratio (DSCR) measures whether a property generates enough income to cover its loan payments. It is calculated by dividing the net operating income by the total annual debt service (principal + interest). A DSCR of 1.0 means the property's income exactly covers the mortgage; anything below 1.0 means it cannot.

Lenders use DSCR as a primary qualifier for commercial real estate loans. Most conventional lenders require a minimum DSCR of 1.20 to 1.25, meaning the property must produce 20-25% more income than the loan payments. Agency lenders (Fannie Mae, Freddie Mac) typically require 1.25 or higher. A DSCR below 1.0 is a hard stop for nearly all lenders, while anything above 1.50 signals strong cash flow and lower lending risk.