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DSCR (debt coverage) calculator.

Lenders size commercial loans on DSCR — how many times your NOI covers the annual loan payment. Check where a deal lands before you apply, and see how much room you have above the lender’s floor.

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Debt service coverage ratio
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DSCR = NOI ÷ annual debt service. A 1.25 DSCR means the property earns $1.25 of NOI for every $1.00 of loan payment. Most commercial lenders require 1.20–1.25 minimum; below 1.0 the property doesn’t cover its own debt. A thin DSCR can cap your loan amount even when LTV allows more.

What DSCR means to a lender

Debt service coverage ratio is how a lender decides whether a property’s income can safely carry a loan. It is simply NOI divided by the annual loan payment. At 1.25, the property earns $1.25 for every dollar of debt service — a 25% cushion. DSCR frequently sets your maximum loan size, so a thin ratio can shrink your proceeds even when the loan-to-value ratio would allow more.

Example. A property with $150,000 NOI and a $110,000 annual payment has a DSCR of 1.36 — comfortably above most lenders’ 1.25 minimum. If rising rates pushed the payment to $135,000, DSCR would fall to 1.11 and the lender would likely cut the loan or require more equity.

Frequently asked questions

What is DSCR?
Debt service coverage ratio is NOI divided by annual debt service (principal + interest). It tells a lender how comfortably a property’s income covers its loan payments. A 1.25 DSCR means $1.25 of income per $1.00 of debt payment.
What DSCR do commercial lenders require?
Most require a minimum of about 1.20 to 1.25 for stabilized properties, and sometimes 1.30–1.40 for riskier asset types or shorter leases. The exact floor drives your maximum loan — a low DSCR can constrain the loan even when the loan-to-value ratio would allow more.
How do I improve a low DSCR?
Raise NOI (higher rents, lower expenses, fill vacancy) or lower debt service (smaller loan, lower rate, longer amortization, or an interest-only period). Because DSCR often sets the loan ceiling, small NOI gains can unlock meaningfully more proceeds.

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Estimates are for planning only and use simplified assumptions — not tax, legal, or investment advice. Verify with your lender, CPA, and a full broker analysis before acting.