DSCR Loan Calculator
Calculate your Debt Service Coverage Ratio, monthly payment, and rental property cash flow in seconds. Free, fast, and accurate.
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What is DSCR?
DSCR (Debt Service Coverage Ratio) is a financial metric that compares a property's annual net operating income to its annual mortgage debt service. It's the primary qualification metric for DSCR loans — a type of investment property mortgage that lets real estate investors qualify based on rental income instead of personal W-2 income.
The DSCR Formula
DSCR = Net Operating Income (NOI) ÷ Annual Debt Service
Net Operating Income (NOI) is calculated as:
NOI = (Gross Rental Income × (1 − Vacancy Rate)) − Operating Expenses
Note: Operating expenses include property taxes, insurance, HOA fees, property management, and maintenance — but they do not include mortgage payments.
What is a Good DSCR Ratio?
Most DSCR lenders require a minimum ratio between 1.20 and 1.25, though some accept ratios as low as 1.0 with adjusted terms. Here's how lenders generally interpret the number:
- 1.25 and above: Strong — qualifies for the best rates and terms
- 1.00 to 1.24: Marginal — may qualify but with higher interest rates or larger down payment
- Below 1.00: Property doesn't cover its debt service from rental income alone — most lenders will decline
How to Use This Calculator
Enter your property's purchase price, loan terms, expected monthly rent, and monthly operating expenses. The calculator instantly shows your DSCR ratio, monthly mortgage payment (principal & interest), net operating income, monthly cash flow, cash-on-cash return, and cap rate. Adjust the inputs to see how different scenarios affect your qualification and returns.
DSCR Loans: A Complete Guide for Real Estate Investors
How DSCR Loans Work
Unlike conventional mortgages that approve borrowers based on debt-to-income (DTI) ratios using personal income, DSCR loans approve the property based on whether the rental income covers the mortgage payment. This makes them ideal for:
- Self-employed investors who can't easily document W-2 income
- Investors with multiple properties whose personal DTI is maxed out
- Foreign nationals buying U.S. rental property
- Investors who want to scale a portfolio quickly
DSCR Loan Requirements (2026)
While specific requirements vary by lender, here's what most DSCR lenders look for:
- Minimum DSCR: 1.20–1.25 (some accept 1.0)
- Minimum credit score: 620–680 (varies by lender and DSCR tier)
- Down payment: 20–25% typically (lower DSCR ratios often require 25–30%)
- Loan amounts: $75,000 to $3 million+
- Property types: Single-family, multi-family (up to 4 units), condos, and sometimes townhomes
- Rental income verification: Appraiser's market rent analysis (no lease required for refinances; purchase loans often need a lease or rent estimate)
DSCR Loan Interest Rates (2026)
DSCR loans typically run 0.50% to 1.50% higher than conventional investment property loans. As of mid-2026, expect rates in the 7.00% to 8.50% range depending on your DSCR ratio, credit score, down payment, and lender. Higher DSCR ratios (1.25+) and stronger credit generally earn the best pricing.
DSCR vs. Conventional Investment Property Loans
The key difference is how you qualify:
- Conventional: Approves based on your personal income and DTI
- DSCR: Approves based on the property's rental income vs. mortgage payment
DSCR loans are more accessible for investors with complex income (self-employed, multiple businesses, foreign income) but cost more in interest. They're also faster to close on portfolio properties.
Pros and Cons of DSCR Loans
Pros:
- No personal income documentation required
- Available to self-employed and foreign nationals
- Allows scaling without DTI limits
- Close in 2-3 weeks on refinances
Cons:
- Higher interest rates than conventional
- Larger down payment required (20-25%+)
- Property must cash flow on paper
- Fewer lenders offer them (though the market is growing)
Frequently Asked Questions
What is a DSCR loan?
A DSCR (Debt Service Coverage Ratio) loan is an investment property mortgage that qualifies borrowers based on the property's rental income rather than personal income. Most lenders require a DSCR of 1.20 to 1.25 or higher.
What is a good DSCR ratio?
A DSCR of 1.25 or higher is considered strong and qualifies for the best rates. A ratio of 1.0 means the property breaks even on its debt service. Ratios between 1.0 and 1.20 may qualify but with higher rates or larger down payment requirements.
How is DSCR calculated?
DSCR = Net Operating Income (NOI) ÷ Annual Debt Service. NOI is calculated as effective gross income (gross rent adjusted for vacancy) minus operating expenses (taxes, insurance, management, etc.). Debt service is the total annual mortgage payment including principal and interest.
What does a DSCR of 1.25 mean?
A DSCR of 1.25 means the property generates 25% more income than needed to cover its annual debt service. For example, if your annual mortgage payment is $20,000, your property needs at least $25,000 in net operating income to achieve a 1.25 DSCR.
Can I get a DSCR loan with no income?
Yes — DSCR loans are specifically designed for borrowers who can't easily document personal income (self-employed, business owners, foreign nationals). Qualification is based on the property's rental income, not your tax returns or W-2s.
What's the minimum credit score for a DSCR loan?
Most DSCR lenders require a minimum credit score of 620, though 680+ is typical for the best rates. Higher DSCR ratios (1.25+) and larger down payments can sometimes offset lower credit scores.
How much down payment do I need for a DSCR loan?
Most DSCR loans require 20-25% down. If your DSCR is below 1.20, expect to need 25-30% down. Some lenders go as low as 15% for borrowers with excellent credit and strong DSCR ratios.
Are DSCR loan rates higher than conventional?
Yes — DSCR loan rates are typically 0.50% to 1.50% higher than conventional investment property loans. The premium reflects the lender's risk and the convenience of no-income-doc qualification.
Important Disclaimer
This DSCR calculator provides estimates for educational and informational purposes only. Results are based on the inputs you provide and standard mortgage formulas; they are not a guarantee of loan approval, terms, or interest rates. Actual DSCR loan qualification, interest rates, and terms depend on lender-specific criteria including but not limited to credit score, down payment, property type, location, rental income verification, and overall borrower profile.
This site is not a lender, broker, or financial advisor. We do not collect personal information, run credit checks, or make credit decisions. For personalized loan quotes, contact a licensed DSCR lender in your state.