DSCR Calculator
Work out your debt service coverage ratio from net operating income and annual debt service, see whether it clears a lender's minimum, and find the largest loan your income actually supports.
Your deal
Gross income less operating expenses, before debt service.
Most conventional commercial lenders sit between 1.20x and 1.25x.
Your DSCR
1.24x
ThinAt the bottom of the usual range. Expect a higher rate, more equity, or both.
- Monthly payment
- $24,738
- Annual debt service
- $296,851
- Cash flow after debt
- $70,649
- Income cushion
- 19%
Max loan at 1.25x
$3,713,982
That is $36,018 less than the loan above. At this DSCR requirement, the income does not support the debt you have entered.
How DSCR is calculated
DSCR = NOI ÷ Annual Debt Service
A DSCR of 1.25x means the property produces 25% more income than it needs to make the loan payment. At 1.00x it breaks even exactly. Below 1.00x, operations do not cover the debt and the difference comes from somewhere else.
Lenders run this before almost anything else, because it decides how much they will lend. They take your NOI, divide by their required ratio, and size the loan so annual debt service never exceeds that figure, which is what the max loan panel above reproduces.
Two things worth checking on any real deal. Use in-place NOI, not pro forma: lenders underwrite trailing income, and a deal that only works on projections tends not to get financed. And if the loan has an interest-only period, remember DSCR looks better during it, many lenders will underwrite on the fully amortizing payment regardless.
Frequently asked questions
What is a good DSCR for commercial real estate?
Most lenders require a minimum DSCR of 1.20x to 1.25x. A DSCR of 1.30x or higher is considered comfortable, and above 1.50x indicates strong debt coverage. The higher the DSCR, the more cushion you have against income declines.
What happens if DSCR drops below 1.0?
A DSCR below 1.0 means the property's income does not cover its debt payments. The shortfall has to come from somewhere else. This typically triggers a loan default or covenant violation, which is why lenders set minimum DSCR requirements in the first place.
How does DSCR affect how much I can borrow?
Lenders use DSCR to size loans. They calculate the maximum annual debt service the NOI can support at their required ratio, then work backward to the loan amount. Higher NOI, or a lower DSCR requirement, means you can borrow more, which is exactly what the max loan figure above reproduces.
Should I use in-place or pro forma NOI?
Use in-place NOI. Lenders underwrite trailing income, not projections, and a deal that only clears the ratio on pro forma numbers tends not to get financed. Run the pro forma separately to understand the upside, but size the debt on what the property earns today.
Does an interest-only period improve DSCR?
It improves the DSCR you would calculate during the interest-only period, because the payment is smaller. Many lenders underwrite on the fully amortizing payment regardless, so a deal that only clears the ratio while interest-only is a deal that may not clear it at all.
Related guides
What is DSCR?
What the ratio measures, and why lenders lead with it.
How to calculate DSCR
The formula step by step, with worked examples.
What is a good DSCR?
Benchmarks by lender and property type.
What is NOI?
The income figure DSCR divides.
Amortization vs interest-only
How loan structure moves the ratio.
CRE loan terms explained
Every financing term in plain language.
More commercial real estate calculators
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The same coverage question in points of occupancy, with expenses and reserves included.
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IRR calculator
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Cap rate calculator
The unleveraged return the debt sits on top of.
Property value calculator
Price per SF for building and land, plus annual rent potential.
TI amortization calculator
Amortize tenant improvements across the lease term.
Lease commission calculator
Leasing commissions from term, rent and structure.
Lease comparison calculator
Compare proposals on net effective rent and NPV.
DSCR is one ratio. The loan sits on a whole rent roll.
DealWise AI derives NOI lease by lease (escalations, reimbursements and rollover), then sizes debt service against it across the hold, so you see the year DSCR is tightest, not just the year you closed.