DSCR Calculator for Rental Property Loans

DSCR loans qualify on the property, not your income: does the rent cover the cost of owning it, and how large a loan will it carry?

Your numbers

Monthly amounts. Enter your own rate. Nothing you type leaves this page.

Rent

Monthly rentFrom the lease, or the appraiser’s market rent for a vacant unit.

The loan

Price or valueOptional: shows the loan-to-value, and lets you enter the loan, taxes and insurance as a percentage.

Loan amount

Interest rateThe rate you were quoted, or one you want to test. See how DSCR loan rates are set.

Loan term

15 years25 years30 years40 years

Payment type

Principal and interestInterest only

Lenders differ on whether they qualify an interest-only loan on the interest-only payment.

Costs

Where is the home? (optional)

Choose a county to fill in its typical property tax and the state’s average insurance rate, as percentages you can still change.

Property taxesOwner-occupied averages run from about 0.3% to 1.9% of value a year (Arizona about 0.5%, Florida 0.8%, Ohio 1.4%). A rental often pays more: it gets no homestead exemption, and buying resets the tax in California and Florida.

InsuranceAverage premiums run about 0.2% to 0.75% of a home’s value a year: about 0.2% in California, 0.3% in Arizona, 0.5% in Ohio and 0.75% in Florida. They have risen since these 2022 figures and run higher with wildfire, wind or flood risk. Include flood insurance if the property needs it, and use a quote.

HOA or condo dues a month

Optional

Your target DSCRAdds a row to the table, for example a lender’s 1.20 minimum.

–Enter the rent to start. Add the loan amount and rate to see the ratio.

An estimate only, not a loan offer. Lenders calculate the ratio their own way.

How it works

DSCR = monthly rent ÷ monthly housing cost (PITIA)

Housing cost is the loan payment (principal and interest, or interest only) plus property taxes, insurance and any HOA dues, often shortened to PITIA. Working backwards, the most housing cost a ratio allows is the rent divided by that ratio. Take away taxes, insurance and dues and what is left is the most the loan payment can be, which the calculator turns into a loan amount at your rate and term.

Keep in mind

Lenders take rent from a lease or an appraiser’s market rent estimate, and some use a lower figure for vacant units.
Many lenders price in steps: 1.25 and above usually gets the best terms, 1.00 to 1.24 is standard, and below 1.00 is a smaller set of programs that want more down or more reserves.
An interest-only payment lifts the ratio. Some lenders qualify on it; others use the full principal and interest payment.
The loan amount the rent supports is one limit; the lender’s loan-to-value limit and minimum down payment are another, and the lower of the two applies.

Questions

What is a good DSCR?

1.25 or higher is strong and usually gets the best pricing. Many lenders accept 1.00, meaning the rent just covers the costs, and some go lower with a larger down payment or more reserves.

Does DSCR include property management fees?

Most DSCR lenders divide rent by PITIA only. Management fees and repairs are not part of the standard ratio, though they matter to your cash flow.

How much can I borrow on a DSCR loan?

Work backwards from the rent. At a 1.25 target the housing cost can be at most the rent divided by 1.25; take away taxes, insurance and dues and the rest is the most the loan payment can be. The table above turns that into a loan amount at the rate and term you enter. The lender’s loan-to-value limit caps it as well. See also: Short-term rental DSCR calculator.

What rent do I need for a DSCR loan?

Multiply the monthly housing cost by the ratio the lender wants. With $2,400 a month of PITIA, a 1.00 ratio needs $2,400 of rent and 1.25 needs $3,000.

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