# Debt Service Coverage Ratio Calculator

> Calculate a property’s debt service coverage ratio from rent, vacancy, expenses and loan terms, and the largest loan that meets your target DSCR.

Category: Real estate · Applies to: Worldwide · Last updated: 2026-10-29
Interactive calculator: https://calculators.geekmidst.com/calculators/debt-service-coverage-ratio-calculator

The debt service coverage ratio (DSCR) is net operating income divided by the year’s loan payments. Above 1 the property pays its own debt; lenders usually want a cushion above that.

Also called: DSCR calculator, Debt coverage ratio calculator.

## Inputs
- Gross rental income (per year) (default 120000)
- Vacancy and credit loss (unit %; default 5; optional)
- Operating expenses (per year) (default 34000; optional)
- Loan amount (default 800000)
- Interest rate (per year) (unit %; default 6.5)
- Amortisation period (unit years; default 25)
- Target DSCR (default 1.25)
- Currency

## Results
- DSCR
- Net operating income (per year)
- Debt service (per year)
- Loan payment (per month)
- Cash flow after debt (per year)
- Largest loan at the target DSCR

## Formula

```
NOI = Gross income × (1 − Vacancy) − Operating expenses;  Debt service = 12 × P × i(1 + i)^n ÷ ((1 + i)^n − 1);  DSCR = NOI ÷ Debt service;  Max loan = PV of (NOI ÷ Target ÷ 12) over n months
```

Where:
- P: loan amount
- i: monthly interest rate
- n: number of monthly payments

## Worked example
1. NOI = 120,000 × 0.95 − 34,000 = $80,000.
2. $800,000 at 6.5% over 25 years = $5,401.66 a month, $64,819.89 a year.
3. DSCR = 80,000 ÷ 64,819.89 = 1.23.
4. At 1.25 the payment can be 80,000 ÷ 1.25 ÷ 12 = $5,333.33 a month, which supports a loan of $789,881.04.

**Result:** The property covers its debt 1.23 times; to reach 1.25 the loan would need to be about $789,881.

## What the result means

A DSCR of 1.23 means income is 23% more than the loan payments. Below 1, the owner must top up each year. If you are short of a lender’s minimum, a bigger deposit, a longer amortisation or higher rent all raise the ratio.

## Assumptions and limits
- The loan is fixed-rate with level monthly payments.
- Operating expenses exclude loan payments, depreciation and income tax.
- Lenders differ on vacancy, management and reserve allowances, so their DSCR may differ from yours.
- Interest-only and adjustable-rate loans are not modelled.

## Questions

### What is a good DSCR?

Many commercial and investment-property lenders look for roughly 1.2–1.35, but the minimum depends on the lender, the property type and the market. Ask yours.

### Is DSCR the same as cash-on-cash return?

No. DSCR compares income with loan payments; cash-on-cash compares the cash left after those payments with the cash you invested.

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_Returns are illustrations at a constant rate, not predictions or guarantees. Investments can lose value. This is not investment advice._

Source: GM¹X CalcVerse — https://calculators.geekmidst.com/calculators/debt-service-coverage-ratio-calculator