How it works
Debt service coverage compares net operating income with required principal-and-interest payments for the same period. Gross rent is not interchangeable with NOI.
The formula
Keep currency, units and time periods consistent. Percentage inputs use percentage points (enter 5 for 5%). Results are rounded only for display; tiny nonzero values may use scientific notation. Undefined ratios are shown as unavailable.
$60,000 NOI divided by $48,000 debt service gives 1.25x DSCR and a $12,000 cushion. A 1.30x target requires $62,400 NOI or limits debt service to $46,153.85.
Calculation method
Monthly input mode annualizes both income and debt service before showing dollar outputs. An optional target rearranges the same ratio to calculate required NOI and supported payments.
Interpretation
Below 1.00x, entered NOI is less than entered debt service. At 1.00x they are equal. A higher ratio indicates more coverage mathematically, but lender definitions and thresholds differ and approval is not inferred.
Limitations
All rents, values, vacancy, expenses and financing terms are your assumptions. Figures exclude income tax and appreciation. Inputs stay in your browser. These calculations do not predict loan approval or investment outcomes.
Method and reference sources
Method and content checked 2026-09-20. These sources provide background, not endorsement or professional certification. The formula and limitations above define this calculator.
- CFPB — How lenders calculate mortgage paymentsLoan principal-and-interest context; property operating expenses and underwriting assumptions are separate.
Frequently asked questions
Does a DSCR above 1 guarantee lender approval?
No. It means entered NOI exceeds entered debt service. Lenders may use different expense adjustments, stressed rates and underwriting requirements.
What is a worked example for DSCR?
$60,000 NOI divided by $48,000 debt service gives 1.25x DSCR and a $12,000 cushion. A 1.30x target requires $62,400 NOI or limits debt service to $46,153.85.