DSCR Calculator

1.25 is the standard institutional minimum for best-tier DSCR loan pricing. Below 1.0 the property is cash-flow negative before debt service — most lenders decline. Between 1.0 and 1.25, the loan qualifies but typically at a 0.25–0.50% rate premium or a lower max LTV (65–70% instead of 75–80%). 1.5+ unlocks the strongest pricing.

Principal + Interest + property Tax + homeowner's Insurance. Most DSCR lenders also include HOA dues if the property is in an association. DSCR specifically excludes operating expenses (property management, repairs, utilities, vacancy reserve) — that's what makes it different from a cap-rate underwrite. DSCR is a debt-service ratio, not an NOI ratio.

Conventional loans qualify the borrower using personal income (W-2, tax returns, debt-to-income). DSCR loans qualify the property using its rental income — the borrower's personal income is not verified. That makes DSCR the dominant takeout financing for BRRRR strategies because investors can scale across multiple properties without hitting personal DTI ceilings.

Most DSCR lenders want minimum 1.0 DSCR at the new appraised value and projected market rent — verified by an appraiser-completed Form 1007 or Form 1025 Rent Schedule. The institutional discipline is to underwrite to 1.25 at conservative rents, so the deal still pencils if rates rise or market rent comes in 10% softer than expected.

No — DSCR uses gross rent, not effective rent. That means the calculator overstates true coverage. The disciplined adjustment is to stress-test the deal at 8–10% vacancy by reducing the rent input — if DSCR still passes 1.0 under that stress, the deal has a real margin of safety.

2026 DSCR rates typically run 1.5–2.5 percentage points above conventional 30-year fixed — call it 8–9% as a working assumption for budgeting. Best-tier DSCR (1.5+ ratio, 65% LTV, 740+ FICO, prepay penalty intact) prices 100–150bps tighter. Get a real quote before committing to a deal.