Free Investor Tool
DSCR Loan Calculator
See whether a rental's cash flow covers the mortgage — the ratio DSCR lenders actually underwrite to.
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Results
Monthly principal & interest
$2,729Taxes + insurance + HOA / mo
$533Total monthly payment (PITIA)
$3,262DSCR
0.98Monthly rent ÷ PITIA
Below 1.0 — the rent doesn't cover the payment. Options: larger down payment, interest-only, or a lender with sub-1.0 programs.
How this works. DSCR lenders divide gross monthly rent by the full monthly payment — principal, interest, property taxes, insurance, and association dues (PITIA). Vacancy, maintenance, and management are not part of the lender's ratio, so treat a passing DSCR as a financing threshold, not proof the deal cash-flows.
FAQ
- What is a DSCR loan?
- A DSCR (debt service coverage ratio) loan qualifies the property instead of the borrower. The lender divides the property's monthly rent by its monthly housing payment (principal, interest, taxes, insurance, and association dues). If the ratio clears the lender's minimum, the loan can be approved without personal income documents like W-2s or tax returns.
- What DSCR do lenders require?
- Most DSCR lenders want a ratio of 1.0 to 1.25 or higher, meaning the rent at least covers the full payment. Some lenders will go below 1.0 for strong credit or lower leverage, usually at a higher rate. A ratio above 1.25 generally unlocks the best pricing tiers.
- How can I improve a low DSCR?
- The main levers are a larger down payment (smaller loan means a smaller payment), a rate buydown, an interest-only period, or documenting higher market rent with a rent schedule (Form 1007). Shopping lenders matters too — qualifying rent rules and tax/insurance treatment differ.
- Does DSCR include property management or maintenance costs?
- No. Standard DSCR underwriting divides rent by PITIA (principal, interest, taxes, insurance, association dues) only. Management, maintenance, and vacancy are not in the ratio — so a DSCR of 1.0 does not mean the property truly breaks even. Underwrite your own deal more conservatively than the lender does.