DSCR Calculator | Debt Service Coverage Ratio & Max Loan Size | Lofty
About Lofty
Lofty is a fractional U.S. real estate investing platform where visitors can browse property shares, learn about rental property investing, review calculators and guides, and access support for marketplace orders and account activity.
The canonical website URL is https://www.lofty.ai/. Public machine-readable context is available at /llms.txt, /llms-full.txt, /.well-known/reasoning.json, and /.well-known/ai-manifest.json.
DSCR Calculator
Enter rent, expenses, and loan terms to get your DSCR, annual NOI, debt service, cash flow after the mortgage, and the largest loan the property supports at 1.25x coverage.
Your numbers
Income
Gross monthly rent
Lenders typically use the lease rent or the appraiser's market rent (Form 1007), whichever is lower.
Expenses
- Vacancy rate%
- Annual property taxes$
- Annual insurance$
- Annual HOA dues$
- Leave at $0 if none.
- Annual maintenance / other opex$
- Repairs, reserves, utilities you pay, and management.
Financing
- Loan amount$
- Interest rate%
- DSCR loans typically price 0.5–1.5 points above conventional investor rates.
- Loan term yrs
Overview
What is a DSCR Calculator?
A DSCR calculator divides a property's annual net operating income (NOI) by its annual debt service to produce the debt service coverage ratio lenders use to qualify investment-property loans. A DSCR of 1.0x means income exactly covers the mortgage; most DSCR lenders want 1.20x to 1.25x or better for their best pricing, and ratios below 1.0x usually mean a smaller loan or a higher rate.
What your scenario is telling you
Qualifies, but not at the best pricing
A DSCR of 1.23x covers the payment but sits below the 1.25x tier. Expect a modest rate add or slightly lower LTV from most lenders.
Requested loan exceeds what the income supports
At 1.25x coverage, this NOI supports about $206,242 of debt, $3,758 less than the $210,000 entered.
How investors usually read these numbers
| Metric | Often strong | Watch out | Why it matters |
|---|---|---|---|
| DSCR | 1.25x or higher | Below 1.0x | The primary qualification metric for rental-property (DSCR) loans; 1.25x typically unlocks the best pricing. |
| DSCR pricing tiers | 1.25x+ for best rates | 1.0x-1.15x adds rate | Lenders price in coverage bands; moving up a tier can cut the rate by 0.25% to 0.75%. |
| Cash flow after debt | $2,000+ per year per unit | Negative | The dollar cushion left after the mortgage, what actually absorbs a vacancy or repair. |
| Expense load | Taxes + insurance under 25% of rent | Above 35% of rent | High-tax, high-insurance states (FL, TX, LA) quietly crush DSCR even when rents look strong. |
| Vacancy assumption | 8% to 10% | 0% | Underwriting at full occupancy overstates NOI and the ratio lenders will actually compute. |
How to run a DSCR analysis
Enter the property's rent
Use the lease rent or the appraiser's market rent estimate. Lenders generally use the lower of the two.Add vacancy and annual operating expenses
Enter property taxes, insurance, HOA dues, and maintenance or other operating costs. These build the NOI that covers the debt.Enter the loan terms
Add the loan amount, interest rate, and term you have been quoted. DSCR loan rates typically run 0.5 to 1.5 points above conventional investor loans.Read the DSCR against lender thresholds
Compare your ratio to the 1.0x / 1.20x / 1.25x tiers. Below 1.0x, expect a smaller loan or a higher rate.Check the max loan at 1.25x
If your DSCR is short, the max-loan figure shows how much debt the property's income actually supports at the standard 1.25x bar.
The math behind the result
Core formulas
- Annual effective income = monthly rent x 12 x (1 - vacancy rate).
- Annual NOI = effective income - property taxes - insurance - HOA - maintenance and other operating expenses.
- Annual debt service = monthly principal-and-interest payment x 12.
- DSCR = annual NOI / annual debt service. 1.0x means income exactly covers the mortgage.
- Max loan at 1.25x = the loan amount whose payment equals (NOI / 1.25) / 12 at your rate and term.
- Cash flow after debt = annual NOI - annual debt service.
Expert takeaways
- DSCR is the metric that decides whether a rental-income loan closes. Lenders size the loan so the property's income covers the payment with a cushion, your personal income often never enters the file.
- Know your lender's formula. This calculator uses the NOI method (income minus operating expenses over P&I). Many DSCR lenders instead divide gross rent by PITIA (principal, interest, taxes, insurance, association dues), which produces a higher-looking ratio from the same property.
Key terms in plain English
DSCR
NOI / annual debt service. The debt service coverage ratio measures how many times a property's net operating income covers its annual mortgage payments. A 1.25x DSCR means the property earns 25% more than it owes the lender each year, the cushion that makes income-based lending work.NOI
Income after operating expenses, before debt. Net operating income is effective rental income minus operating expenses such as taxes, insurance, HOA, maintenance, and management. It excludes the mortgage itself, which is exactly why it can be compared against the debt service to form the coverage ratio.DSCR loan
Mortgage qualified on property income, not yours. A DSCR loan is an investment-property mortgage underwritten primarily on the property's rent coverage rather than the borrower's personal income, no W-2s or tax returns required. Rates run 0.5 to 1.5 points above conventional investor loans, with pricing tiered by the coverage ratio and LTV.PITI
Principal, interest, taxes, insurance, association dues. PITIA is the full monthly obligation many DSCR lenders use as the denominator, pairing it with gross rent as the numerator instead of NOI. The two conventions produce different ratios for the same property, so always confirm which formula your lender applies.Debt service
Total annual loan payments. Debt service is the sum of all principal and interest payments owed over a year. For a fixed-rate loan it is simply the monthly payment times twelve; interest-only loans have lower debt service during the IO period, which flatters DSCR until amortization begins.
People also ask
What is a DSCR calculator?
A DSCR calculator computes the debt service coverage ratio: a property's annual net operating income divided by its annual mortgage payments. It builds NOI from rent, vacancy, taxes, insurance, HOA, and maintenance, computes the payment from your loan amount, rate, and term, and reports the ratio lenders use to qualify investment-property loans, plus the maximum loan the income supports at the standard 1.25x threshold.
How is DSCR calculated?
DSCR equals annual NOI divided by annual debt service. For example, a property with $28,704 of effective rent and $7,600 of operating expenses has $21,104 of NOI; against $17,191 of annual mortgage payments, the DSCR is 1.23x. Note that some lenders use a simpler convention: gross rent divided by PITIA (principal, interest, taxes, insurance, association dues), which yields a different number from the same property, so confirm your lender's formula.
What is a good DSCR?
Most lenders treat 1.25x as the comfortable standard: the property earns 25% more than its mortgage costs. A DSCR of 1.0x to 1.2x qualifies with many DSCR lenders but at higher rates or lower LTV, while below 1.0x means the property does not cover its own payment, some lenders will still lend at reduced leverage and premium pricing, but the loan starts every month underwater on cash flow.