DSCR Calculator
Calculate a rental property's debt service coverage ratio (DSCR) from rent and the full loan payment, and see the rent a 1.25 DSCR requires.
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Quick Answer
DSCR Calculator estimates dscr of 0.70x and principal + interest of $2,661 for this scenario.
Key Takeaways
- DSCR Calculator estimates dscr of 0.70x and principal + interest of $2,661 for this scenario.
- DSCR lenders qualify the property instead of your personal income: they divide the monthly rent by the full monthly debt service (principal, interest, taxes, insurance, and HOA). At 7% on this loan the principal and interest portion is $2,661, bringing total debt service to $3,136 per month.
- Many DSCR lenders look for 1.25x or higher, meaning rent covers the full loan payment with 25% to spare. Ratios from 1.00x to 1.24x are sometimes approved with a larger down payment or a higher rate, and below 1.00x the rent does not cover the payment at all. This scenario works out to 0.70x.
Calculation Output
DSCR
0.70x
Principal + Interest
$2,661
Total Monthly Debt Service (PITI + HOA)
$3,136
Annual Debt Service
$37,635
Rent Left After Debt Service
-$936
Rent Needed for a 1.25 DSCR
$3,920
Result Chart
DSCR
0.70x
Principal + Interest
$2,661
Total Monthly Debt Service (PITI + HOA)
$3,136
Annual Debt Service
$37,635
Rent Left After Debt Service
-$936
Key Facts
| DSCR | 0.70x |
|---|---|
| Principal + Interest | $2,661 |
| Total Monthly Debt Service (PITI + HOA) | $3,136 |
| Annual Debt Service | $37,635 |
| Rent Left After Debt Service | -$936 |
| Rent Needed for a 1.25 DSCR | $3,920 |
How This Estimate Works
- DSCR lenders qualify the property instead of your personal income: they divide the monthly rent by the full monthly debt service (principal, interest, taxes, insurance, and HOA). At 7% on this loan the principal and interest portion is $2,661, bringing total debt service to $3,136 per month.
- That produces a DSCR of 0.70x, which is below 1.00 — the rent does not fully cover the loan payment on its own.
- The rent falls $936 short of the full loan payment each month before vacancy, maintenance, repairs, and management costs, so the property would need other income or a smaller loan to carry itself.
- To reach the common 1.25 benchmark on this payment, the property would need to rent for about $3,920 per month. Working the other way, the current rent supports a total monthly debt service of up to $1,760 at a 1.25 DSCR — a useful ceiling when sizing the loan or negotiating price.
FAQ
What is a good DSCR for a rental property loan?
Many DSCR lenders look for 1.25x or higher, meaning rent covers the full loan payment with 25% to spare. Ratios from 1.00x to 1.24x are sometimes approved with a larger down payment or a higher rate, and below 1.00x the rent does not cover the payment at all. This scenario works out to 0.70x.
How is DSCR calculated?
Divide the monthly rent by the total monthly debt service — principal, interest, property taxes, insurance, and HOA dues. Here that is the rent divided by $3,136, which gives 0.70x. Some lenders use annual figures, which produces the same ratio.
How much rent do I need for a 1.25 DSCR?
Multiply the total monthly debt service by 1.25. On this payment of $3,136, the property needs about $3,920 in monthly rent to reach a 1.25 DSCR.
Does a DSCR loan check my personal income?
Generally no — DSCR loans are underwritten on the property's rent coverage rather than your salary or tax returns, which is why the ratio itself matters so much. Lenders still typically check credit, the property appraisal, and rent documentation.
Is the rent left over after debt service my cash flow?
Not quite. Whatever remains after the loan payment still has to absorb vacancy, maintenance, repairs, and property management before anything is profit. Treat the leftover as a coverage cushion, and run a full cash-flow estimate before making an offer.