Above 1.00
Income covers the loan payment. The higher the ratio, the more room there is for vacancy, repairs or a rent drop before payments are at risk.
DSCR calculator
Check whether a property's income covers its loan payment. Use the rental-loan method (rent ÷ PITIA) or the commercial method (NOI ÷ debt service).
On this page
DSCR loan calculator
A DSCR loan qualifies you on the rental's income instead of your personal income. One lender's 2026 program guide defines the ratio as monthly gross rent ÷ PITIA: principal, interest, taxes, insurance and association dues. The starting figures are hypothetical.
- DSCR
- 1.13
- Rent covers the payment
- Monthly PITIA
- $2,128
- Principal and interest $1,678
- Rent for a 1.00 ratio
- $2,128
- Rent for 1.25: $2,660
Formula: DSCR = monthly gross rent ÷ PITIA. For interest-only loans, lenders use ITIA: interest, taxes, insurance and association dues.
Minimum ratios differ by lender, loan type and credit profile. Ask your lender which rent figure and minimum it uses. Starting figures are hypothetical examples, except where a section names its source. Results are screening estimates, not appraisals, loan approvals or investment advice.
Commercial DSCR calculator
For income property, bank examiners and agency lenders divide net operating income by the year's total loan payments. The starting figures are the OCC handbook's example.
- DSCR
- 1.31
- NOI ÷ annual debt service
- Annual debt service
- $528,606
- $44,051 a month
- NOI cushion
- $165,394
- Income left after loan payments
Formula: DSCR = net operating income ÷ total annual debt service (principal and interest on every loan on the property).
Agency lenders underwrite net cash flow after reserves and may test the payment at an interest-rate floor, so their ratio can be lower than this one.
How to calculate DSCR
Both methods divide income by the loan payment. They differ in which income and which payment they use.
Rental loan: find PITIA
A $240,000, 30-year loan at 7.5% has principal and interest of $1,678 a month. Add $300 of property tax and $150 of insurance for PITIA of $2,128.
Rental loan: divide rent by PITIA
$2,400 ÷ $2,128 = 1.13. The rent covers the full payment with 13% to spare.
Commercial: find annual debt service
In the OCC example, a $6.3 million loan at 7.5% amortized over 30 years costs $528,606 a year.
Commercial: divide NOI by debt service
$694,000 ÷ $528,606 = 1.31. The OCC handbook calls 1.31 good and acceptable to most lenders, if the borrower and property meet other requirements.
The rental-loan ratio uses gross rent, before vacancy, repairs and management. The commercial ratio uses NOI, after those costs. The same property usually scores higher on the rental-loan method.
How to read a DSCR
Exactly 1.00
Income equals the payment, with no cushion. Any vacancy or unexpected cost has to come from your own cash.
Below 1.00
Income does not cover the payment, and you pay the gap each month. Some DSCR programs still lend here: one 2026 guide we reviewed accepts ratios down to 0.75 on some loans.
Stress the ratio
The OCC handbook notes that vacancy and collection loss can move from a typical 3% to 5% up to 10% or more in a weak economy. Rerun the calculator with lower rent before you rely on a thin ratio.
Frequently asked questions
QUICK ANSWERS
It depends on the lender and program. One 2026 program guide we reviewed sets a 0.75 minimum on some loans and requires 1.00 for interest-only loans and short-term rentals. Check your lender's current guide, which also sets which rent figure counts.
In the program guide we reviewed, a purchase without a lease uses the appraiser's market rent. With a lease, it uses the lower of lease rent and market rent, with exceptions for documented higher rent.
No. Debt-to-income compares your personal debts with your personal income. DSCR compares one property's income with that property's loan payment.
The commercial method does, because NOI is after operating expenses. The rental-loan method usually does not. It divides gross rent by PITIA.
How we reviewed this
Sources reviewed October 16, 2026. The commercial example uses the OCC handbook's published figures; the rental-loan example is hypothetical.