DSCR Calculator

Debt Service Coverage Ratio (DSCR) is the primary metric commercial lenders use to size a loan. It measures the asset's cash flow relative to its debt obligations. A DSCR of less than 1.0 means the property loses money every month. Institutional lenders typically require a minimum of 1.25x.

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Formula: DSCR = Net Operating Income (NOI) / Total Debt Service

If NOI is $100,000 and annual mortgage payments are $80,000, DSCR = 1.25x. The asset generates 25% more income than required to service the debt.

Income & Expenses (Annual)

Gross Operating Income ($) Operating Expenses ($)

Debt Service (Annual)

Principal Payments ($) Interest Payments ($)

Results

Net Operating Income (NOI) --

Total Debt Service --

DSCR --

Why DSCR Matters

Unlike residential lending, which often relies on your personal PAYG income (W-2), commercial property lending is largely non-recourse or heavily weighted toward the asset's performance. The bank wants to know that if you disappear, the asset pays for itself. For more on debt structuring, read our guide on Leverage Mechanics.