Underwrite
Debt service coverage ratio calculator
DSCR tells a lender (and you) whether the property's income covers the payment. Formula is simple: NOI ÷ annual debt service. This page is the formula explainer with a working calculator - aimed at rental / investment underwriting, not a DSCR loan shop funnel.
Assumptions
Returns stack
- Annual debt service
- —
- DSCR
- —
- Hurdle
- 1.20
When to use
Learning the ratio before a broker call; stress-testing a payment bump; pairing with the rental-specific DSCR page when you already have NOI.
When not to
Don't treat this as a loan quote or rate lock. And don't assume your NOI worksheet matches every lender's line items without checking.
Assumptions: Default debt service is principal and interest (PI) on an amortizing loan. PITI can be toggled - label which you use. Not a loan product marketplace.
Worked examples
Input
NOI $30,000 Debt service $22,500/yr
Output
DSCR 1.33
Income covers debt with cushion - typical lender comfort zone.
Input
NOI $30,000 Debt service $32,000/yr
Output
DSCR 0.94
Property income alone does not cover the payment - dig before you assume approval.
Common traps
- Lender NOI worksheets differ - match their lines.
- IO periods inflate DSCR until amortizing starts.
- This is not a loan product marketplace or rate quote.