Underwrite
Calculate DSCR for a rental property
Lenders care whether the property’s income can cover the payment. DSCR (debt service coverage ratio) is NOI ÷ annual debt service. Below 1.0 means operations don’t cover the loan on paper. Enter NOI and loan payment terms — get DSCR and a plain-language pass/fail against a hurdle you set (e.g. 1.20).
Assumptions
Returns stack
- Annual debt service
- —
- DSCR
- —
- Hurdle
- 1.20
When to use
Before you assume a DSCR loan will underwrite, stress-testing rate bumps, or checking a broker’s “it cash flows” claim.
When not to
This is not a loan product marketplace. Interest-only DSCR can look fine until amortizing kicks in — match the lender’s NOI worksheet.
Assumptions: Default debt service is monthly PI × 12; label PITI if you included taxes and insurance.
Worked examples
Input
NOI $24,000 Debt service $18,000
Output
DSCR 1.33
Clears a common 1.20-style hurdle on paper.
Input
NOI $24,000 Debt service $26,000
Output
DSCR 0.92
Operations don’t cover the loan — shortfall.
Common traps
- Some lenders use different NOI definitions — match their worksheet.
- Interest-only DSCR can look fine until amortizing kicks in.
- This page is not a loan product marketplace.