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Debt Service Coverage Ratio (DSCR) Calculator

Assess property cash flow strength by comparing NOI to annual debt service.

Debt Service Coverage Ratio (DSCR) Calculator

Assess ability to cover annual debt payments with net operating income (NOI).

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Guide

How to interpret DSCR and improve coverage

  • DSCR above 1.25 is typically considered strong for stabilized properties.
  • Improve DSCR by increasing NOI (rents, occupancy) or lowering debt service (rate, term, principal).
  • Include a realistic replacement‑reserve when presenting DSCR to lenders.

Frequently Asked Questions

Detailed, SEO‑oriented DSCR guidance

What is DSCR?

Debt Service Coverage Ratio compares NOI to annual debt service. A value above 1.0 means cash flow covers debt payments; lenders typically target 1.20–1.30+.

Why do lenders care about DSCR?

It's a primary risk metric. Higher DSCR implies more cushion to weather vacancies, repairs, or rate increases, reducing default risk.

What counts as debt service?

Principal plus interest due over a year, including all mortgages or loans secured by the property.

Is DSCR pre‑tax or after‑tax?

DSCR uses operating income (NOI) which is pre‑tax; taxes are excluded to focus on property cash generation.

How do capex and reserves affect DSCR?

Lenders often consider a replacement‑reserve assumption; higher reserves reduce effective NOI, lowering DSCR.

What DSCR do lenders require?

Common thresholds are 1.20–1.30 for stabilized assets; riskier assets or shorter leases may require higher DSCR.

How can I improve DSCR?

Increase rents, reduce expenses, refinance to a lower rate or longer term, add equity to reduce loan amount, or improve occupancy.

Does interest‑only improve DSCR?

Yes—temporarily lowers debt service and boosts DSCR, but amortization later can reduce DSCR unless NOI grows.

Is DSCR the same as ICR?

No. Interest Coverage Ratio compares NOI (or EBITDA) to interest only; DSCR includes principal and interest.

What DSCR is considered risky?

Below 1.10 is often considered weak; below 1.0 means cash flow cannot fully cover debt service.

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Debt Service Coverage Ratio (DSCR) Calculator

Assess property cash flow strength by comparing NOI to annual debt service.

How to use Debt Service Coverage Ratio (DSCR) Calculator

Step-by-step guide to using the Debt Service Coverage Ratio (DSCR) Calculator:

  1. Enter your values. Input the required values in the calculator form
  2. Calculate. The calculator will automatically compute and display your results
  3. Review results. Review the calculated results and any additional information provided

Frequently asked questions

How do I use the Debt Service Coverage Ratio (DSCR) Calculator?

Simply enter your values in the input fields and the calculator will automatically compute the results. The Debt Service Coverage Ratio (DSCR) Calculator is designed to be user-friendly and provide instant calculations.

Is the Debt Service Coverage Ratio (DSCR) Calculator free to use?

Yes, the Debt Service Coverage Ratio (DSCR) Calculator is completely free to use. No registration or payment is required.

Can I use this calculator on mobile devices?

Yes, the Debt Service Coverage Ratio (DSCR) Calculator is fully responsive and works perfectly on mobile phones, tablets, and desktop computers.

Are the results from Debt Service Coverage Ratio (DSCR) Calculator accurate?

Yes, our calculators use standard formulas and are regularly tested for accuracy. However, results should be used for informational purposes and not as a substitute for professional advice.