How to use the DSCR calculator
- Pick the method. Most residential DSCR lenders use rent ÷ PITIA; commercial and portfolio lenders often use NOI ÷ debt service.
- Enter the monthly rent (lease or appraiser's market rent) and any other income.
- Enter the price, down payment, interest rate and term, plus yearly property tax, insurance and monthly HOA.
- Choose the lender's minimum DSCR, and set vacancy and repair costs for the NOI method and cash flow.
What DSCR lenders look for
| DSCR | What it means | Typical lender response |
|---|---|---|
| Below 1.00 | Rent doesn't cover the payment | Declined, or a no-ratio loan at a higher rate |
| 1.00–1.19 | Rent just covers it | Often approved, higher rate or more down |
| 1.20–1.24 | Some room to spare | Approved by most lenders |
| 1.25 and up | Comfortable cushion | Best pricing |
Every lender sets its own grid, so get quotes from a few.
How the interest rate changes your DSCR
Same $300,000 rental, 25% down, $2,400 rent:
| Rate | PITIA | DSCR |
|---|---|---|
| 6.25% | $1,810 | 1.33 |
| 6.75% | $1,884 | 1.27 |
| 7.25% | $1,960 | 1.22 |
| 7.75% | $2,037 | 1.18 |
| 8.25% | $2,115 | 1.13 |
A one-point rate change moves the ratio by about 0.1. Buying the rate down with points, a larger down payment, or an interest-only period can lift a deal over the line.
How to raise your DSCR
- Put more down. A smaller loan lowers principal and interest.
- Find a lower rate, or pay points to buy it down.
- Raise the rent to market before refinancing; lenders use the lower of the lease and the appraiser's market rent.
- Shop insurance and appeal the tax assessment. Both sit in PITIA; see how property taxes work.
- Choose a property with lower HOA dues, which count in full.
DSCR vs cap rate vs cash-on-cash return
DSCR answers the lender's question: does the rent cover the loan? Cap rate measures the property's return without financing, and cash-on-cash return measures what your own cash earns. A good deal usually passes all three. Check them with the cap rate calculator, the cash-on-cash return calculator and the full rental property calculator. Refinancing after a rehab? DSCR loans are a common exit for the BRRRR method.
Remember the real costs
A DSCR of 1.25 doesn't mean 25% profit. Lenders' rent ÷ PITIA ignores vacancy, repairs, capital expenses and management, which can take 20–35% of rent. That's why the calculator also shows cash flow after vacancy and costs. New to rentals? Start with how to become a landlord.
Run your rentals like a business
RentRoll is a landlord dashboard that tracks rent, expenses, leases and cash flow for every property, so your numbers are ready when a lender asks. Try the free demo with sample properties.
An estimate; lenders' rules and rates vary. Not financial advice.
Frequently asked questions
How do you calculate DSCR for a rental property?
What is a good DSCR?
What does a DSCR of 1.0 mean?
Do DSCR loans check my income?
How much down payment does a DSCR loan need?
Is DSCR the same as NOI ÷ debt service?
Written by
Finance Specialist & Editor, VaultlyApps
Emma Whitfield writes and edits the VaultlyApps money guides and free calculators. Her focus is US household finance — budgeting on a real paycheck, paying down credit card and student debt, emergency funds and savings goals, renting — and the money side of freelancing and small-business income, from pricing and profit margins to self-employment tax. Every guide is researched against primary sources such as IRS publications and the CFPB, every number is checked in our tested calculators, and tax content is reviewed each year when new IRS figures come out. Emma is not a licensed financial adviser or tax preparer; her work is general education, not personal advice.
Researched against primary US sources, checked against independent calculators and reviewed by a finance expert on our team. Written for US readers — general education, not financial, tax or legal advice. Editorial policy · Disclaimer
