DSCR Calculator

Most residential DSCR programs treat 1.20 as the comfortable minimum and 1.25 as the level where pricing stops being penalised. A ratio between 1.00 and 1.19 is often still lendable, at a lower loan-to-value or a higher rate. Some lenders will write below 1.00 — a so-called no-ratio or low-ratio loan — but you should expect a materially larger down payment. Commercial lenders on multifamily typically start at 1.25 and go higher for older assets or shorter leases. None of these are rules; they are where the market has settled, and any individual lender's overlays beat all of them.

Because there is no single agreed formula. Residential DSCR lenders usually divide gross scheduled rent by PITIA — principal, interest, taxes, insurance and HOA — and ignore vacancy, management and maintenance entirely. Commercial underwriters divide net operating income by principal and interest only, after charging vacancy, management and a repairs reserve. On the same property those two produce visibly different numbers, and the second is almost always lower. Ask which the lender uses before you argue about the answer, and use the toggle here to match it.

Whichever you type. Lenders differ here too. A DSCR lender ordering an appraisal with a rent schedule attached will commonly take the lesser of the appraiser's market rent and the rent on your signed lease, which means a lease you wrote below market caps the ratio you can claim. If the unit is vacant, they use the appraiser's market rent, sometimes with a haircut. Run it both ways: the gap between your lease rent and market rent is the exposure you carry into underwriting.

For qualifying, yes. For returns, not necessarily. A very high ratio usually means you have put a lot of cash down, and a property covering its debt three times over with half the price in equity may be earning a poor return on that equity. DSCR is a lender's safety measure, not an investor's performance measure — it answers whether the income survives a bad year, not whether your money is well placed. Read it beside cash-on-cash return, not instead of it.

More than most people expect, because the whole payment sits in the denominator. On a thirty-year amortising loan, a one-point move in the rate changes the payment by roughly ten to twelve percent, and the ratio moves by about the same amount in the opposite direction. That is why a deal underwritten at 1.25 during a rate lock can arrive at closing near 1.12 if the lock expires. The rate sensitivity table on this page shows the size of that move on your specific loan.

If you are underwriting for yourself, yes — a property that only covers its debt when it is occupied every day of the year and never needs a repair does not cover its debt. If you are matching a residential DSCR lender's figure, usually no: that convention charges only taxes, insurance and HOA. Both are on this page. The honest position is to qualify with the lender's number and decide with yours, and to be unsurprised when yours is lower.