How it works
How this tool works.
The debt-service coverage ratio answers a lender’s first question about a rental: does the property earn enough to cover its own loan? It divides the property’s net operating income by its annual debt payments, so a ratio above 1.0 means the income clears the debt with room left over.
Enter the annual NOI and the yearly loan payments, and this calculator estimates the DSCR. It’s arithmetic on the figures you provide — a way to see where a deal stands before you take it to a lender, not a promise that any lender will approve it.
Enter the annual net operating income — annual rent (monthly rent × 12) minus operating expenses, excluding the mortgage.
Enter the annual debt service: the monthly loan payment (principal & interest) multiplied by 12.
The tool divides NOI by debt service to get the ratio — 1.0 means the income exactly covers the payments; higher means a cushion.
The result is an estimate from your inputs; each lender computes NOI and sets its own minimum ratio differently.
Make the result useful
DSCR underwriting context
NOI is annual effective income after recurring operating expenses, before debt service.
Debt service is total scheduled annual principal and interest under the modeled loan.
The ratio measures property-income coverage, not borrower liquidity or personal income.
Use the lender’s own definitions when evaluating a real loan.
The assumptions that move this result
NOI
Annual property operating income before loan payments.
Debt service
Annual scheduled principal and interest.
Period
Matching annual period for both values.
Basis
Lender or owner underwriting definition.
DSCR = annual NOI ÷ annual debt service
Use the output as a documented scenario result, not a guarantee.
Read the number in context
Worked scenario
Scenario: $36,000 NOI ÷ $30,000 debt service = 1.20 DSCR.
Edge case
Edge case: interest-only debt service can raise DSCR without improving long-term amortization.
Lenders set their own income adjustments, minimums, reserves, and approval criteria.
Before you act
• Reconcile NOI to records.
• Confirm lender debt-service definition.
• Stress test lower income and higher costs.
Worked formula
DSCR = annual NOI ÷ annual debt service
Is this a forecast?
No. It calculates the assumptions you enter.
Can it replace professional review?
No. Use current records and qualified advice.
What should I save?
Keep the assumptions and source records used for the decision.