DSCR Calculator

How to use the calculator

Pick a method and fill in its income fields. Then compute debt service from the loan amount, rate and amortization, or enter annual principal and interest directly. Enter the DSCR you want to test against to see the maximum debt service and loan.

What the result means

With $39,000 of NOI and a $400,000 loan at 7% over 30 years ($31,934.52 a year), DSCR is 1.22, so $7,065.48 a year is left after debt service; a 1.25 target allows $31,200 of annual debt service, about a $390,800 loan.

Formula and units

NOI method: NOI = gross rent × (1 − vacancy %) − operating expenses, and DSCR = NOI ÷ annual principal and interest. Rent ÷ PITIA method: DSCR = monthly rent ÷ (monthly principal and interest + taxes, insurance and HOA). Computed P&I = L × r ÷ (1 − (1 + r)^−n), r = rate ÷ 12, n = years × 12. Max debt service at a target = NOI ÷ target (NOI method) or rent ÷ target − TIA per month (PITIA method); the max loan is the present value of that monthly payment.

Worked examples

NOI method on a $400,000 loan at 7%: Gross scheduled rent per year (NOI method): 60000 $/year; Vacancy and credit loss (NOI method): 5 %; Operating expenses per year, excluding debt (NOI method): 18000 $/year; Monthly rent (rent ÷ PITIA method): 3200 $/month; Monthly taxes, insurance and HOA (rent ÷ PITIA method): 450 $/month; Annual principal and interest (if entered): 30000 $/year; Loan amount: 400000 $; Interest rate (example): 7 % APR; Amortization: 30 years; Target DSCR to test (example 1.25): 1.25 ratio; DSCR method: noi; Debt service: loan.
Example result: DSCR: 1.22; Income used: $39,000.00 NOI per year; Debt service used: $31,934.52 P&I per year; Annual cash flow after debt service: $7,065.48; Max debt service at target DSCR: $31,200.00 P&I per year; Max loan at target DSCR (entered rate and amortization): $390,799.68.

Rent ÷ PITIA with $24,000 a year of P&I: Gross scheduled rent per year (NOI method): 60000 $/year; Vacancy and credit loss (NOI method): 5 %; Operating expenses per year, excluding debt (NOI method): 18000 $/year; Monthly rent (rent ÷ PITIA method): 3200 $/month; Monthly taxes, insurance and HOA (rent ÷ PITIA method): 450 $/month; Annual principal and interest (if entered): 24000 $/year; Loan amount: 400000 $; Interest rate (example): 7 % APR; Amortization: 30 years; Target DSCR to test (example 1.25): 1.25 ratio; DSCR method: rent; Debt service: entered.
Example result: DSCR: 1.31; Income used: $3,200.00 rent per month; Debt service used: $2,450.00 PITIA per month; Annual cash flow after debt service: $9,000.00; Max debt service at target DSCR: $25,320.00 P&I per year; Max loan at target DSCR (entered rate and amortization): $317,148.97.

Limitations and common mistakes

The two methods give different numbers for the same property and are not interchangeable; use the one your lender or analysis specifies. Lenders set their own minimum DSCR, income haircuts and expense rules; the 1.25 target is an example to edit, not an underwriting standard. Capital expenditures, reserves and income tax are not modeled.

Mixing methods, for example dividing annual NOI by a monthly PITIA or counting taxes and insurance both in operating expenses and in PITIA, gives a ratio that matches neither definition.

Sources and assumptions

Method DSCR-RATIO-1.0; last formula review 2026-11-04. Sources and their supported claims. Calculation methodology.