How this calculator works
Most residential DSCR lenders use a simple version of the ratio: gross monthly rent divided by the full monthly housing payment, known as PITIA.
What the numbers mean
A DSCR of 1.00 means the rent exactly covers the payment. Below 1.00, the property does not carry itself, and most lenders will either decline, cut the loan amount, or charge a higher rate. Many programs price best at 1.20 to 1.25 and above.
Lender versions differ
Commercial lenders usually divide net operating income (rent after vacancy and all operating expenses) by annual principal and interest instead. That version is stricter. The rental cash flow calculator shows the NOI-based DSCR.
Frequently asked questions
What is a DSCR loan?
A mortgage for investment property that qualifies you based on the property's rental income instead of your personal income. Lenders check that rent covers the payment by a set margin, along with credit score and down payment.
What DSCR do lenders require?
Requirements vary. Many lenders accept 1.00, some go below 1.00 with a larger down payment and higher rate, and the best pricing often starts around 1.20 to 1.25.
Which rent do lenders use?
Usually the lower of the signed lease and the appraiser's market rent estimate (form 1007 for single-family). For a vacant property, it is typically the appraiser's estimate.
Does an interest-only payment raise my DSCR?
Yes. An interest-only payment is smaller than an amortizing one, so the ratio goes up and the maximum loan grows. Some lenders qualify interest-only loans on the amortizing payment anyway, so confirm how yours calculates it.
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Results are estimates based on the numbers you enter and simplified assumptions. They are not financial, tax, lending or legal advice. Confirm figures with your lender, accountant, attorney or the relevant county before you commit money.