Estimate debt service coverage ratio from annual rental income, property expenses, and proposed loan terms.
DSCR Calculator
How to use this calculator
Enter the property's projected gross monthly rental income (or weekly average × 4.33), the proposed loan amount, interest rate, and term. Add monthly property tax, homeowners/landlord insurance, HOA dues if any, and any other recurring fixed costs the property carries. The calculator produces the property's debt service coverage ratio — gross rent divided by total monthly housing expense. A DSCR of 1.0 means rent exactly covers the payment; 1.25+ is typical for the best DSCR-loan pricing; below 1.0 indicates negative cash flow and limits your financing options. Use the calculator before making an offer on an investment property to confirm the deal cash-flows at your target purchase price and rate. If the math doesn't work, adjust either the offer price or the down payment to bring DSCR above 1.0.
How the math works
DSCR = Gross Monthly Rent ÷ Total Monthly PITIA, where PITIA includes principal, interest, taxes, insurance, and HOA/association dues. Worked structure: take a single-family rental purchase, apply your down payment to compute the loan amount, then run the loan through the standard amortization formula at today's DSCR rate (typically 0.5–1.0% above conventional investor pricing). Add monthly tax, insurance, and HOA to get total monthly housing expense (PITIA). Divide projected monthly rent by PITIA to get the DSCR figure. Most DSCR programs accept 1.0 or higher; specialty programs allow down to 0.75 with rate premiums and tighter credit/reserve requirements. Short-term rental (Airbnb) DSCR uses gross monthly revenue from the platform — often estimated via AirDNA or 12 months of trailing statements — divided by the same PITIA. Since short-term revenue is more variable, lenders typically apply a haircut (10–20%) to projected income before computing DSCR. Use the calculator with current rates from the mortgage rates page for accurate cash-flow modeling.
When to use this vs the others
Use this calculator for any investment property where you're qualifying based on the property's rental income rather than your personal income. If you're qualifying conventionally (using personal income, tax returns, and W-2s), the standard mortgage calculator is the better fit. The DSCR calculator is purpose-built for investor financing — long-term rentals, short-term rentals (Airbnb/VRBO), and BRRRR strategies. For owner-occupied multi-unit properties (2–4 unit where you live in one), the affordability calculator is the right starting point, since you're qualifying on personal income.
Frequently asked questions
What DSCR ratio do most lenders require?
Most DSCR programs require 1.0 or higher (rent exactly covers the payment). The best pricing typically appears at 1.25+. A handful of specialty programs accept 0.75 with rate premiums and tighter credit/reserve requirements. Below 0.75 generally isn't financeable via standard DSCR.
Does this calculator account for vacancy and management?
By default it uses gross rent (no vacancy or management deduction), which matches how most DSCR programs underwrite. For your own underwriting, you should haircut gross rent by 5–10% for vacancy and add 8–10% for management — the calculator's optional 'effective rent' field lets you input adjusted figures.
Can I include short-term rental income in DSCR?
Most DSCR programs accept short-term rental income via either an AirDNA market projection or 12 months of platform statements (Airbnb/VRBO). The lender typically applies a 10–20% haircut to projected revenue before calculating DSCR to account for variability.
What happens if DSCR is below 1.0?
Standard DSCR programs decline. Specialty 'low-DSCR' programs accept down to 0.75 with higher rates, larger down payments, and reserve requirements. Below 0.75 you'll need to either negotiate a lower purchase price, bring more cash to lower the loan amount, or look at conventional investor financing if you can qualify on personal income.
Are reserves and closing costs in this calculation?
DSCR itself is a cash-flow ratio and doesn't include reserves or closing costs. Most DSCR programs separately require 3–6 months of PITIA in liquid reserves at close, plus standard closing costs (2–4% of loan amount). Budget for those independently of DSCR.