Loan Size and DSCR Calculator
Enter the property's net operating income and the loan terms to see its debt service coverage ratio. Or enter the coverage ratio your lender asks for to see the largest loan the income can support.
Debt service coverage
Debt service coverage ratio-
Loan payments per year-
Largest loan at the ratio you chose-
Largest payment per month-
An estimate for planning only, not financial advice or a loan offer.
How it works
The debt service coverage ratio (DSCR) is the yearly net operating income divided by the yearly loan payments. A ratio of 1.0 means the income only just covers the payments; lenders usually ask for a margin above that.
The largest loan is found by dividing the NOI by the coverage ratio you want to get the yearly payment you can afford, then working out the loan that this payment repays at your rate and term.
Find a property to run the numbers on
Questions
It is the net operating income of a property divided by its yearly debt payments. It shows how many times the income covers the loan payments.
It varies by lender, loan type and property. Many commercial lenders look for a ratio comfortably above 1.0, such as 1.20 to 1.35. Ask the lender for its minimum.
Raise net operating income by increasing rent or cutting costs, or lower the payments with a smaller loan, a lower rate or a longer amortization.
No. It uses the principal and interest payment only. Property tax and insurance belong in the operating costs that make up the net operating income.