DSCR Calculator
Calculate debt service coverage ratio, annual debt service, monthly payment, loan constant, and the maximum commercial mortgage supported by NOI.
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How it works
Follow the underwriting path lenders use: input the deal, apply constraints, then read the result.
Enter NOI and loan amount
Start with the property's annual net operating income and proposed loan balance. DSCR compares the income stream to the annual debt service that loan creates.
DSCR Formula
Debt service coverage ratio measures whether property income is sufficient to pay the mortgage. It is sensitive to interest rate and amortization, so it often becomes the binding constraint when rates rise. Read the DSCR formula and annual debt service guide; use a consistent annual income basis and the lender’s required payment assumptions.
Read the calculation methodology and limitations.
DSCR = Net Operating Income / Annual Debt Service
Max Annual Debt Service = NOI / Minimum DSCR
Max Loan = Max Annual Debt Service / Loan ConstantIf NOI is $900,000 and annual debt service is $675,000, DSCR is 1.33x. At a 1.25x lender floor, the deal has a 0.08x cushion.
See This Calculator in Action
Explore institutional underwriting examples. Load any scenario into the live calculator with one click to customize rates, amortization, and property valuation.
Bank 1.25x DSCR
DSCR = Net Operating Income / Annual Debt ServiceThe loan clears a common DSCR floor, but final proceeds still need to pass LTV and debt yield.
Underwriting Metric Comparison & Lender Sizing Standards
Compare debt yield against DSCR and LTV constraints, and review typical sizing assumptions across lender types.
Typical Commercial Lender Underwriting Minimums (Reference Benchmarks)
5 Core Sizing Tests1.20x – 1.25x1.25x
1.25x – 1.30x1.30x
1.25x – 1.35x1.35x
1.30x – 1.40x1.35x – 1.40x
1.40x – 1.50x+1.45x – 1.55x+
| Property Type | Bank / Agency Minimum | CMBS Minimum | Life Company Minimum |
|---|---|---|---|
| Multifamily (Top Tier) | 1.20x – 1.25x | 1.25x | 1.25x – 1.30x |
| Industrial / Logistics | 1.25x – 1.30x | 1.30x | 1.25x – 1.35x |
| Anchored Retail | 1.25x – 1.35x | 1.35x | 1.30x – 1.40x |
| Office (Class A) | 1.30x – 1.40x | 1.35x – 1.40x | 1.35x – 1.45x |
| Hotel / Hospitality | 1.40x – 1.50x+ | 1.45x – 1.55x+ | 1.45x – 1.60x+ |
Worked examples
| Scenario | Calculation | Result |
|---|---|---|
| Stable multifamily | $900,000 NOI / $675,000 debt service | 1.33x DSCR |
| Thin office refinance | $700,000 NOI / $640,000 debt service | 1.09x DSCR, below most lender floors |
| Loan sizing | $1,200,000 NOI / 1.25x minimum | $960,000 maximum annual debt service before converting to loan proceeds |
Conversion reference
| Target DSCR | Max Debt Service | Implied Max Loan | Coverage Level |
|---|---|---|---|
| 1.15x | $869,565 | $11,594,203 | Stretched / Bridge |
| 1.20x | $833,333 | $11,111,111 | Agency Standard / Tier 1 |
| 1.25x | $800,000 | $10,666,667 | Conventional Bank Floor |
| 1.35x | $740,741 | $9,876,543 | CMBS Retail / Office |
| 1.50x | $666,667 | $8,888,889 | Hospitality / Conservative |
Quick facts
- DSCR below 1.00x means NOI does not cover annual debt service.
- DSCR can improve when rates fall or amortization stretches, even if NOI is unchanged.
- Lenders often size proceeds by dividing NOI by minimum DSCR, then by the loan constant.
- A high DSCR does not guarantee approval if LTV or debt yield fails.
Editorial Team
Commercial Real Estate Finance Reviewers
- Calculations reviewed against standard CRE lending formulas for DSCR, LTV, cap rate, and debt yield
- Methodology cross-checked against lender-style loan sizing using NOI, value, loan constant, DSCR, LTV, and debt yield
Our editorial team builds and reviews commercial real estate finance calculators around the way lenders actually size debt: property income, collateral value, annual debt service, and lender risk thresholds. Results are educational screening estimates, not loan quotes, tax advice, legal advice, or a commitment to lend.
Methodology: formulas are calculated from borrower-entered inputs using standard CRE underwriting relationships for NOI, debt yield, DSCR, LTV, cap rate, loan constant, and maximum loan proceeds.
Reviewer note: pages are reviewed for formula accuracy and updated when lender benchmarks or site methodology changes.
Disclaimer: results are educational estimates only and are not financial, legal, tax, valuation, or lending advice.
Frequently asked questions
A common target is 1.25x or higher, though lender type, property type, market, and loan structure can move the requirement up or down.
Divide net operating income by annual debt service. For example, $500,000 of NOI and $400,000 of annual debt service equals 1.25x DSCR.
DSCR depends on interest rate and amortization because it uses annual payments. Debt yield ignores loan terms and divides NOI by loan amount.