DSCR Loan Calculator for Rental Property
Rent over the full payment, taxes, insurance and HOA included — the way DSCR lenders size 1–4 unit rentals. See the rent you need and the loan it supports.
How it is calculated
DSCR = Monthly rent ÷ (P&I + Taxes + Insurance + HOA)
A DSCR loan qualifies the property, not your income: the lender divides the rent it will credit — the lease, or the appraiser’s market rent — by the whole monthly housing payment. Nothing is deducted for vacancy, repairs or management, which is why this ratio runs higher than the commercial one. At 1.00x the rent exactly covers the payment.
- Rent
- Gross monthly rent: the signed lease, or market rent from the appraisal (Form 1007) when the unit is vacant.
- P&I
- Principal and interest, or interest alone during an interest-only period.
- Taxes, Insurance
- The annual bills divided by twelve, whether or not they are escrowed.
- HOA
- Monthly association dues, where the property has them.
A worked deal example
A rental bringing in $2,900 a month, financed with $300,000 (75% of a $400,000 price) at 7.250% on a 30-year amortization.
- Monthly rent
- $2,900
- Loan amount
- $300,000
- Rate
- 7.250% / 30 yr
- Monthly PITIA
- $2,596.53
- DSCR
- 1.12x
Principal and interest come to $2,046.53 a month; taxes, insurance and dues add $550.00, so the full payment the lender tests is $2,596.53. $2,900 of rent over that payment is a DSCR of 1.12x, which clears a 1.00x minimum. At that minimum the rent would carry up to $344,486. That leaves $303 a month before vacancy, repairs and management — the ratio does not count them, but the property still has to pay them.
Frequently asked questions
How do you calculate DSCR for a rental property?
What DSCR do I need for a DSCR loan?
How much can I borrow with a DSCR loan?
Does a DSCR loan use gross rent or net income?
Is this the same DSCR commercial lenders use?
Rent needed at each lender minimum
DSCR lenders price in tiers: the higher the ratio, the better the rate and the larger the loan they will make. For the default loan — $300,000 at 7.25%, with a $550 monthly tax and insurance bill — this is the rent each common minimum asks for, and the most the current $2,900 rent would carry at each one.
| Lender minimum | Rent needed | Max loan at $2,900 rent | Default deal |
|---|---|---|---|
| 0.75x | $1,947 | $486,189 | Clears |
| 1.00x | $2,597 | $344,486 | Clears |
| 1.10x | $2,856 | $305,839 | Clears |
| 1.25x | $3,246 | $259,464 | Falls short |
Below 1.00x is a no-ratio loan: the rent does not cover the payment, and lenders who offer it want a larger down payment and charge more.
Why a passing DSCR can still lose money
The ratio counts rent against the payment and nothing else. The property also has empty months, repairs and, if you are not managing it yourself, a manager to pay. Allow 5% of rent for vacancy, 8% for repairs and 8% for management — rough shares, not lender rules — and the default deal’s $303 a month becomes -$306 once $609 of those costs is paid, at a DSCR of 1.12x.
That is the gap between qualifying and cash-flowing. A lender looks at whether the rent covers the debt; an owner has to look at whether it covers the debt and the building. Run both before you offer, and treat a ratio close to 1.00x as a property that will need cash from you in a bad month.
Related calculators
Estimates only. This calculator is an educational tool, not financial advice, a loan offer, or a commitment to lend. Actual payments, loan sizing and closing costs depend on your lender's underwriting, the day-count convention in your loan documents, and fees not modeled here. Confirm any figure with your lender or advisor before acting on it. For an official reference, see Buying a House: tools and resources (Consumer Financial Protection Bureau).