Dscr calculator

Free dscr calculator: enter NOI and annual debt service to check your debt coverage ratio — built for CRE investors sizing lender-ready acquisitions.

Net Operating Income (NOI) — $

Annual income minus operating expenses, before debt service

Annual Debt Service — $

Total annual principal + interest payments on all property debt

DSCR (NOI / Annual Debt Service)

1.25x

A 1.25x DSCR — within the 1.20x–1.50x band most CRE lenders consider financeable. The property covers debt 1.25 times; serviceable for conventional lenders, though agency lenders may want closer to 1.25x–1.35x.

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DSCR (NOI / Annual Debt Service)

1.25x

Where AI changes the answer

The Debt Service Coverage Ratio (DSCR) is the single number most commercial lenders run first. A DSCR of 1.25x means your property's NOI covers its debt payments 1.25 times — the lender's cushion against vacancy spikes or expense surprises. Most conventional CRE lenders set a floor of 1.20x; agency programs (Fannie Mae Multifamily, Freddie Mac Optigo) typically require 1.25x or higher. Below 1.0x the property cannot service its own debt from operating income. These thresholds are ESTIMATES — lender requirements vary by loan type, asset class, leverage ratio, and borrower credit. Where AI changes the analysis: after you enter your NOI and debt service, the tool reads the resulting DSCR and surfaces what a commercial lender is likely thinking at that coverage level — whether the deal reads as financeable, tight, or broken — and identifies which input lever (NOI growth, rent increase, or lower leverage) would move the ratio meaningfully. This is decision-support only, not a loan commitment or lending advice. Related tools: pair this with the NOI Calculator to model operating expense improvements that lift NOI, the Cap Rate Calculator to size the asset value against market comps, and the Cash-on-Cash Calculator to see what the debt service leaves behind for equity returns.

Questions real estate teams ask

What is DSCR and how do I calculate it?

DSCR (Debt Service Coverage Ratio) = Net Operating Income / Annual Debt Service. For example, a property with $120,000 NOI and $96,000 in annual mortgage payments (principal + interest) has a DSCR of 1.25x. A ratio above 1.0 means income exceeds debt obligations; below 1.0 means the property cannot cover its own debt from operations.

What DSCR do commercial lenders require?

Most conventional commercial real estate lenders set a minimum DSCR floor of 1.20x. Agency lenders (Fannie Mae Multifamily, Freddie Mac) typically require 1.25x or higher. Bridge and hard-money lenders may accept lower coverage but will price the risk in the rate. These are ESTIMATES — requirements vary by lender, loan program, asset class, and LTV. Always confirm with your specific lender.

What is included in Annual Debt Service for DSCR?

Annual Debt Service is the total of all principal and interest payments on the property's loans over one year. Include every lien: first mortgage, mezzanine debt, and any subordinate financing. Do not include property taxes, insurance, or operating expenses — those are already subtracted when you calculate NOI.

How does DSCR relate to NOI and cap rate?

Cap rate = NOI / Property Value (unlevered yield). DSCR = NOI / Debt Service (lender coverage test). Cash-on-cash = (NOI − Debt Service) / Cash Invested (equity return). All three start from the same NOI figure — improving your NOI lifts all three metrics simultaneously. That is why the NOI Calculator and DSCR Calculator are best used together.

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