DSCR calculator
Work out your debt service coverage, or the largest loan a given NOI supports. No signup, no email.
Annual, before debt service
Debt service coverage ratio
1.45×
$310,321 of annual debt service
DSCR = NOI ÷ annual debt service. Below 1.00× the property does not cover its own loan payments. Amortisation drives this as much as rate — a 25-year schedule at the same rate is materially tighter coverage than 30.
Common questions
- How do you calculate DSCR?
- Divide net operating income by annual debt service. A property with $450,000 of NOI and $310,000 of annual principal and interest has a DSCR of about 1.45x.
- What DSCR do lenders require?
- Most commercial lenders want at least 1.20x to 1.25x on stabilised assets, and often 1.30x or higher on riskier property types, shorter leases or secondary markets. Below 1.00x the property does not generate enough income to cover its own debt payments.
- Does DSCR use NOI before or after debt service?
- Before. NOI is revenue less operating expenses and stops short of the mortgage. Debt service is the denominator, so subtracting it from NOI first would double-count it.
- How much can I borrow at a given DSCR?
- Divide NOI by the target DSCR to get the annual debt service you can afford, then run the mortgage constant backwards using the rate and amortisation to get the loan amount. The Maximum loan mode above does this.
- Does amortisation affect DSCR?
- Substantially, and it is routinely underestimated. A 25-year amortisation produces higher annual payments than a 30-year at the same rate, so the same NOI covers a smaller loan. When a lender moves you from 30 to 25 years the rate may be unchanged while your proceeds fall noticeably.
The rest of the analyst’s job
The arithmetic is the easy part. Everre does the offering memoranda, the broker opinions of value, the lease abstracts and the rent rolls — the work that usually costs you an analyst. The CRM is free and there are no per-seat fees.
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