A DSCR loan qualifies on the property's rent instead of your tax returns. So the first question every investor should answer is simple: does the rent cover the payment? Enter your numbers below and you'll see the full monthly payment (PITIA), your debt service coverage ratio, and the largest loan the rent can support at the two DSCR levels lenders use most.
How to use this DSCR calculator
- Monthly rent. For a leased property, use the current lease. For a vacant or purchase property, use market rent. Most lenders take it from the appraiser's rent schedule (often Form 1007), so be realistic rather than optimistic.
- Purchase price / value and down payment. These set the loan amount. On a cash-out refinance, enter the appraised value and use the down-payment field as your remaining equity (for example, 25% for a 75% LTV refinance).
- Interest rate and amortization. Use a rate you've actually been quoted, or a conservative estimate. DSCR loans commonly amortize over 30 years.
- Payment type. Interest-only lowers the payment, which raises your DSCR. Some lenders calculate DSCR on the interest-only payment and others on the fully amortized one, so run both.
- Taxes, insurance and HOA. Use the actual tax bill, a real insurance quote and the HOA statement. Underestimating these is the most common reason a deal that looked good on paper falls short in underwriting.
The DSCR formula, with a worked example
DSCR = monthly rent ÷ monthly PITIA
PITIA is principal, interest, taxes, insurance and association dues: the full housing payment the lender underwrites.
Here's the example the calculator loads with:
- Price $300,000, 25% down → loan of $225,000
- 7.5% interest, 30-year amortization → principal and interest of about $1,573/month
- Taxes $3,600/year ($300/month) + insurance $1,500/year ($125/month) → $425/month
- PITIA ≈ $1,573 + $425 = $1,998/month
- Rent $2,500 ÷ $1,998 = DSCR ≈ 1.25
At 1.25, the rent covers the payment with about 25% to spare. In the same scenario, the calculator shows the rent would support a loan of about $297,000 at a 1.00 DSCR, or about $225,000 at 1.25. Your actual loan is also capped by the lender's maximum LTV.
What DSCR do lenders require?
There's no single standard. Each lender sets its own minimum, and that's exactly why it helps to have a broker shop the deal.
- 1.25 and above: comfortably positive cash flow. This fits the widest range of DSCR programs and usually earns the best pricing.
- 1.00 to 1.24: the rent covers the payment. Many DSCR programs lend here, sometimes with pricing or LTV adjustments.
- Below 1.00: the rent doesn't fully cover PITIA. Some lenders still lend, usually with more equity. For these deals, look at LOANKWEST's Non-DSCR rental loans, which have no minimum DSCR or credit score.
- No ratio at all: if your equity is the strength of the file, our No Minimum FICO DSCR program qualifies on equity instead of the ratio or a credit score.
How LTV, credit and loan structure change the picture
DSCR is only one part of the file. Lenders also look at loan-to-value, credit score, reserves (months of PITIA in the bank), property type and whether the loan closes in an LLC. A lower LTV lowers the payment and raises your DSCR. A higher credit tier can lower your rate, which also raises DSCR. A prepayment-penalty structure (for example, a declining 5-4-3-2-1 schedule) can sometimes buy a better rate. If you plan to sell or refinance soon, weigh that against the flexibility you lose.
On a LOANKWEST DSCR loan, our lender network offers $100K to $3M, up to 85% LTV on purchases, and closing in your LLC. Short-term rentals are OK. See DSCR rental loans for the full fine print.
Short-term rental DSCR: using Airbnb and VRBO income
Lenders that accept short-term-rental income usually want it documented with a 12-month booking history or a third-party projection of market income, not a single peak month. When you enter short-term-rental income above, use a 12-month average net of seasonality. If the property only qualifies on its best month, it's not ready for a DSCR loan yet.
Foreign nationals and investors without U.S. credit
The math is the same. Rent still has to cover PITIA. Foreign-national DSCR loans typically ask for more down. See our Foreign National DSCR loans (no U.S. credit score or SSN required), also available in Spanish and Chinese.
Why run your numbers through a broker?
LOANKWEST is a loan broker, not a lender, and that works in your favor. A single lender can only offer its own minimum DSCR, its own rate sheet and its own overlays. We take one application and present your deal to the lenders in our network whose guidelines actually fit it, so a 0.95 DSCR deal that one lender declines can still find a home. There's no credit pull to apply. Get matched ▸
DSCR calculator FAQs
What is a good DSCR for a rental property loan?
A DSCR of 1.25 or higher is considered strong and fits the widest range of programs. Many lenders work at 1.00, and some go below 1.00 with more equity.
Does the DSCR calculation include taxes and insurance?
Yes. DSCR loans divide rent by PITIA, which is principal, interest, taxes, insurance and any HOA dues, not just the loan payment.
Can I get a DSCR loan if my DSCR is below 1.0?
Sometimes. Some lenders accept ratios below 1.00 with a larger down payment, and no-ratio programs like our Non-DSCR rental loans don't require a minimum DSCR at all.
Is interest-only better for DSCR?
An interest-only payment is lower, so the DSCR is higher. Lenders differ on whether they qualify you on the interest-only or the amortized payment, so check both results.
Is this calculator a loan offer?
No. It's an estimate for planning. Actual terms come from the lender after underwriting. LOANKWEST arranges business-purpose loans through its lender network and is not a lender.