DSCR (Debt Service Coverage Ratio) Calculator
Calculate Debt Service Coverage Ratio for commercial real estate loans. Determine if property income covers debt payments.
How it works
DSCR = NOI ÷ Annual Debt Service. Measures property's ability to cover debt payments from operating income.
Example
$36,000 NOI ÷ $28,800 debt service = 1.25x DSCR (meets most lender requirements).
FAQ
What is a good DSCR ratio?
Most lenders require DSCR of 1.20-1.25x or higher. Above 1.25x is preferred, while below 1.0x means the property can't cover its debt service.
How is DSCR calculated?
DSCR = Net Operating Income ÷ Annual Debt Service. It shows how many times the property's income covers the debt payments.
What is included in debt service?
Annual debt service includes both principal and interest payments on all property-related loans, calculated as monthly payment × 12.
Why do lenders care about DSCR?
DSCR measures the property's ability to generate enough income to cover debt payments, indicating the loan's risk level to the lender.