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.

Open in Deal Workbench

DSCR (NOI / Annual Debt Service)

1.25x

Beyond the calculator

Our recommended implementation for underwriting

This calculation is one step in a larger workflow. NextAutomation builds the underwriting workflow around the model your team already uses. It organizes the deal room, maps rent roll, T12 and lease inputs into your workbook and keeps a document and page reference beside each extracted field.

Workflow coveredInitial screening, pro forma and investment committee materials in one deal record.
Documents handledRent rolls, T12 operating statements, leases and offering memoranda in PDF, XLSX and DOCX.
Fit with your modelInputs map into your existing workbook. Your assumptions and calculation logic stay as they are.
Human reviewScans and uncertain extractions are flagged. Your team approves the assumptions and makes the decision.

See the underwriting workflow Read the investment committee memo case study

Check the periods before trusting your DSCR

Fictional example: annual NOI is $120,000 and annual debt service is $96,000. DSCR is 1.25x. Increase annual debt service to $108,000 while holding property income, value and the loan balance fixed. Cash remaining after debt falls from $24,000 to $12,000.

Source schedules linked to highlighted workbook inputs and two underwriting scenarios. — 01Trace the source
02Approve the input
03Recalculate the scenario
Keep the path from the original document to the accepted model input visible.

Metric	Original debt service	Higher debt service
DSCR (NOI / Annual Debt Service)	1.25x	1.11x

Both cases use a $2 million property value and price, $1.4 million loan, $600,000 cash invested, $200,000 gross rent, $180,000 effective gross income and $60,000 operating expenses. This simplified example excludes additional capital spending and transaction costs.

Use annual figures on both sides of the ratio. Keep seller-reported income separate from accepted underwriting adjustments. Lender calculations may use an adjusted cash-flow basis and specified debt assumptions; this simple NOI ratio is not a loan approval test.

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.

More free CRE tools

Cap Rate Calculator for CRE Investors
Free cap rate calculator: enter NOI and property value to get your capitalization rate in seconds, built for CRE investors sizing up sourcing targets.
NOI Calculator for Real Estate Investors
Free noi calculator: enter effective gross income and operating expenses to compute net operating income — for CRE investors building accurate underwriting.
Cash on Cash Return Calculator for CRE
Free cash on cash return calculator: enter annual cash flow and cash invested to compute your equity yield — for CRE investors modeling levered returns.