DSCR Loan Calculator — Rental Property & Commercial DSCR

DSCR means two different things depending on who is lending. For a DSCR loan on a one-to-four-unit rental, the non-QM mortgage investors use to qualify on the property's rent instead of their own income, the ratio is monthly rent divided by PITIA: principal and interest, property tax, homeowners insurance and HOA dues. For commercial property it is annual net operating income divided by annual debt service. The calculator does both; the rental mode is the default.

In the rental mode, enter the rent from the lease (or the appraiser's market rent if the unit is empty), the price, down payment, rate, taxes, insurance and HOA dues. The calculator works out the loan payment, the full PITIA and the ratio, then the rent you would need for a 1.00 or 1.25 DSCR and the largest loan the rent supports at each. Most DSCR lenders set 1.00 as the minimum, meaning the rent just covers the payment, and price better from about 1.15 to 1.25 up; many still lend down to 0.75 or 0.80 with a larger down payment and more reserves, and some offer no-ratio loans at 70% to 75% loan-to-value. An interest-only option lowers the payment and raises the ratio, which is why lenders offer it.

Lenders use gross rent and do not subtract vacancy, repairs, capital expenses or management, so the cash flow shown is before those costs and a DSCR just above 1.00 usually means a property that loses money in a normal year. In the commercial mode, net operating income is rent and other income minus operating expenses, before debt payments, depreciation and income tax, and most commercial lenders want at least 1.25.