DSCR loan calculator
Answer two questions to view the rental ratio that a DSCR lender calculates.
Your DSCR (rent divided by PITIA)
This is an estimate from your own figures, not a loan offer, a rate quote or a pre-approval; the lender's own numbers decide.
Understanding your DSCR figure
Dividing rental income by the monthly loan cost is what a DSCR loan calculator does. We display the result with two decimals, which is how lenders record it on the file.
| DSCR | What it means | Published minimums it meets |
|---|---|---|
| Below 1.00 | The full payment is not covered by rental income, so the owner puts in money each month. | Easy Street Capital lists no published minimum, while New Silver sets 0.75. |
| 1.00 to 1.09 | Rent covers the whole payment, with little or nothing left over. | Lima One Capital publishes 1.00 |
| 1.10 to 1.24 | Rent runs 10% to 24% above the payment. | Kiavi publishes 1.10 to prequalify |
| 1.25 and above | The rent is at least 25% more than the payment, which is the margin bank lenders often ask for. | Clears every minimum in our table |
Each lender supplies the minimum shown in the right column on its own page. All of them also appear in our DSCR lenders table. On a given file, a lender may ask for more. Rural properties, small loan amounts and short credit histories often lead to stricter requirements.
How a lender works out the ratio
On a DSCR loan, gross monthly rent is the top number in the fraction. Two sources give the figure: what a signed lease states, or the market rent recorded by an appraiser for an empty unit. The rent schedule shows that market rent. The fraction uses PITIA for the new loan as its lower value, with principal and interest, plus property tax, insurance and any HOA dues included.
Instead, commercial and bank lenders often use yearly loan payments when dividing NOI. NOI is short for net operating income, which is rent less operating costs. Either method works in the calculator. Choose yearly NOI in the first step. Our DSCR formula page puts worked examples of both methods next to each other.
What the lender asks for after the ratio
The ratio starts the lender's file but does not finish it. Expect requests for a credit report and bank statements showing the down payment and reserves for some months. Besides the lease or rent schedule and the insurance quote for a landlord policy, the lender will also want the company papers for an LLC loan.
Published credit floors, loan sizes and down payments appear on our DSCR loan requirements page. Every file gets its own rate quote. Our DSCR loan rates page explains the factors that affect those rates. We do not post any number that would be stale tomorrow.