Debt Service Coverage Ratio Calculator

Use our free DSCR calculator to determine your debt service coverage ratio. DSCR measures your ability to cover debt payments with net operating income. Key metric for commercial loans.

Financial

Net Operating Income (Annual)

Annual Debt Service (Total Payments)

Formula

The Debt Service Coverage Ratio (DSCR) is a critical metric used by commercial lenders to evaluate a property's ability to generate enough income to cover its debt payments.

DSCR = Net Operating Income / Total Debt Service

Percentage: The percentage value you want to apply

Number: The original number or value

Result: The calculated result

How It Works

1Enter your annual net operating income (NOI).
2Enter your annual debt service (total principal + interest payments).
3DSCR is calculated by dividing NOI by debt service.
4Most lenders require DSCR of 1.25 or higher.

Examples

,000 NOI with ,000 annual debt service

1.DSCR = ,000 / ,000
2.DSCR = 1.50
3.Property generates 50% more income than needed to cover debt

Result: 1.50

Frequently Asked Questions

Most commercial lenders require a DSCR of at least 1.25. A DSCR below 1.0 means the property does not generate enough income to cover its debt payments.

Lenders use DSCR to assess risk. A higher DSCR indicates the borrower can comfortably meet debt obligations. It is the most important metric for commercial real estate loans.

You may need to increase your down payment to lower the loan amount, negotiate a lower interest rate, extend the loan term, or increase the property's net operating income.

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What is DSCR in Real Estate?

CalculateMe Team

Last updated: 2026-07-17

Frequently Asked Questions

Most commercial lenders require a DSCR of at least 1.25. A DSCR below 1.0 means the property does not generate enough income to cover its debt payments.

Lenders use DSCR to assess risk. A higher DSCR indicates the borrower can comfortably meet debt obligations. It is the most important metric for commercial real estate loans.

You may need to increase your down payment to lower the loan amount, negotiate a lower interest rate, extend the loan term, or increase the property's net operating income.

Debt Service Coverage Ratio Calculator

Formula

How It Works

Examples

,000 NOI with ,000 annual debt service

Frequently Asked Questions

What is a good DSCR?

How is DSCR used in lending?

What if my DSCR is too low?

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Debt Service Coverage Ratio Calculator

Formula

How It Works

Examples

,000 NOI with ,000 annual debt service

Frequently Asked Questions

What is a good DSCR?

How is DSCR used in lending?

What if my DSCR is too low?

Related Calculators

Related Articles