DSCR Loan Calculator

An investment-property mortgage underwritten on the property's income rather than the borrower's. There is no W-2, no tax return and no personal debt-to-income test; the lender asks whether the rent covers the payment and whether the loan is small enough against the value. That is why this calculator has no income fields for you at all. In exchange you generally pay a rate one to three points above an owner-occupied loan, put twenty to twenty-five percent down, and sign a personal guarantee even when the borrower is an LLC.

Because two limits apply and you get the smaller of them. The LTV cap is a fixed percentage of value; the coverage cap is whatever loan the rent can service at the lender's minimum ratio. When the coverage cap is the smaller one, the property is not producing enough income to carry a loan that size, and no amount of down payment changes that — more down payment only reduces the loan you were already allowed. The fix is more rent, a lower rate, a longer amortization, or an interest-only period.

Yes, and it is the most common lever on a DSCR file. An interest-only payment on the same balance is roughly fifteen to twenty-five percent smaller than a thirty-year amortising one at today's rates, so the same rent services a proportionally larger loan. The cost is that the balance does not fall: at the end of the interest-only period you either refinance, sell, or start amortising over a shorter remaining term at a much higher payment. Lenders also price interest-only with an add-on, which claws back part of the benefit.

No. Both caps are computed on the loan amount, and the fees come out of what you receive or out of your pocket at closing — they do not reduce what you are approved for. They do change what the money costs. Two points on a loan you hold three years is worth roughly two-thirds of a point on the rate; on a loan you hold ten years it is closer to a quarter point. The effective cost figure on this page spreads the lender's charges across the full term, which is the most favourable reading of them — a shorter hold concentrates the same charge into fewer years and pushes the real cost well above the figure shown.

Usually the lesser of the signed lease and the appraiser's market rent, taken from the 1007 rent schedule ordered with the appraisal. A vacant unit is underwritten at appraised market rent, sometimes with a haircut. This matters for sizing: a lease you wrote below market, or a long-tenured tenant you never raised, caps the loan you can get even though the property would rent for more tomorrow. Run the calculator at both rents and treat the difference as the cost of that lease.

No. Minimum coverage ratios, LTV caps and the way each lender computes the ratio all vary by program, by credit score, by whether the property is a short-term rental and by how many financed properties you already hold. The 1.20 minimum and the 75 to 80 percent LTV cap in the defaults here are common, not universal, and a lender's overlays beat any published matrix. Get the actual ratio definition and cap in writing before you use this number to make an offer.